annual report le meridien

MAC CHARLES (INDIA) LIMITED

Annual Report 2009-10

C O N T E N T S

Notice ofAnnual General Meeting 2

Directors’ Report 3

Auditors’ Certificate onCorporate Governance 5

Auditors’ Report 6

Balance Sheet 8

Profit & Loss Account 9

Schedules to Accounts 10

Notes on Accounts 17

Cash Flow Statement 23

Corporate Governance Report 24

Management Discussion &Analysis Report 28

Balance Sheet Abstract &Business Profile 28

Subsidiary :

Nedstar Hotels Pvt Ltd 30

Consolidated Financial Statements 41

BOARD OF DIRECTORS

Mr. C. B. Pardhanani Chairman

Mr. J. Matthan Director

Mr. K. R. Sampath Director

Mr. P. B. Appiah Director

Ms. Sangeeta C. Pardhanani Managing Director

VICE PRESIDENT FINANCE &COMPANY SECRETARYMr. M.S. Reddy B.Com., L.L.B., MBIM, FCA, FCS

REGISTERED OFFICE MERIDIEN - BANGALORE28, Sankey Road, Bangalore - 560 052Tel : 080-2226 2233 / 2228 2828Fax : 080-2226 7676 / 2226 2050e-mail : [email protected] us at : www.lemeridien-bangalore.com

PRINCIPAL BANKERSState Bank of India, BangaloreState Bank of Mysore, Bangalore

AUDITORSK. B. Nambiar & Associates101, President Chambers# 8, Richmond RoadBangalore - 560 025

REGISTRARS &SHARE TRANSFER AGENTSBgSE Financials Limited(Subsidiary of Bangalore Stock Exchange Ltd.,)Registrar & Transfer Agent (RTA Division)No. 51, 1st Cross, J.C. Road,Bangalore - 560 027.Tel : 080 - 4132 9661 / 4157 5234Fax : 080 - 2227 6674Email : [email protected]


Thirtieth Annual General Meeting of MAC CHARLES (INDIA) LTD. will be held on TUESDAYthe 31st AUGUST 2010 at Hotel Le Meridien, No. 28, Sankey Road, Bangalore - 560 052 at 3 p.m.

Note:

(a) As a measure of economy, copies of Annual Report will not be distributed at the Meeting.Members are requested to kindly bring their copies to the Meetimg.

(b) Children accompanying a member/proxy will not be allowed inside the meeting hall.

INVESTORS’ QUERIESe-mail : [email protected]

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NOTES:

a) The Register of Members and Share Transfer Book will remainclosed from Saturday the 21st August 2010 to Tuesday the31st August 2010 (both days inclusive) for the purpose ofpayment of dividend, if any, to be declared at this meeting.

b) Members holdings shares in multiple folios in Physical mode arerequested to apply for consolidation to the Registrar and TransferAgent (R&T Agent)/Company along with relevant Share Certificates.

c) Members desirous of changing from physical form todematerialization (electronic form) may apply with theirrespective Depository Participants (DP’s). The Company’sshares are already demated with CDSL and NSDL.

d) The dividend, if any, in respect of Equity Shares held in electronicmode will be paid on basis of beneficial ownership, details ofwhich are furnished by National Securities Depository Limited(NSDL) and Central Depository Services (India) Limited(CDSL), for the said purpose.

e) For effecting change of Address/Bank details/Electronic ClearingServices (ECS) Mandate, if any, Members are requested to notifythe same to the following :

(i) If shares are held in Physical mode, to the Company/R&TAgent of the Company, i.e., BgSE Financials Limited, RTADivision, No.51, 1st Cross, J.C. Road, Bangalore – 560 027.

(ii) If shares are held in electronic mode, to their DepositoryParticipant (DP). The Company/R&T Agent will not entertainrequest for noting change of Address/Bank details/ECSMandate, if any.

f) Members holding shares in electronic mode may kindly not thattheir Bank Account details and 9 digit MICR code of their Bankers,as noted in the records of their DP, shall be used for the purposeof overprinting on Dividend Warrants, or remittance of dividendthrough Electronic Clearing Service (ECS), wherever applicable.It is, therefore, necessary that the members should ensure thattheir correct Bank details, and 9 digit MICR Code number arenoted in the records on the DP.

Reserve Bank of India (RBI) is providing ECS facility for paymentof dividend in select cities. Members holding shares in physicalmode and desirous of availing this facility may give the details oftheir Bank account, with 9 digit MICR Code, along withphotocopy of a cheque or a blank cancelled cheque relating tothe designated Bank account, to the R&T Agent/Company.

As per the ECS Mandate noted in the records of DP, the amountof dividend will be credited directly to bank account throughRBI’s Electronic Clearing Service (ECS). The credit of dividendamount can also be confirmed from pass book / bank statement.Kindly ensure that the ECS mandate is correctly recorded withDP so that no ECS rejection takes place.

g) Pursuant to the Section 205A(5) of the Companies Act, 1956,dividend for the financial year ended on 31 March 2003 whichremain unclaimed is due for transfer to the Investor Education &Protection Fund (IEPF) on 30.10.2010. Members who have sofar not encashed the Dividend Warrants for the above year areadvised to submit their claim to the Company’s R&T Agentsnamely BgSE Financials Limited, Bangalore, by quoting theirfolio number / DP Id & Client Id. On or before 30.09.2010 Itmay be noted that once the unclaimed dividend is transferred toIEPF as aforesaid, no claim shall lie on the Company in respectof such unclaimed dividend.

h) Members are requested to :-

(i) bring their copy of Annual Report and Attendance Slip atthe venue of the meeting.

(ii) Quote their folio/DP & Client Id No. in all correspondencewith the R&T Agent/Company.

(iii) Note that briefcase, mobile phone, bag, eatables and otherbelongings will not be allowed to be taken inside the venueof the meeting for security purpose and shareholders will berequired to take care of their belongings.

(iv) Note that no gifts will be distributed at the Annual GeneralMeeting.

(v) A member entitled to attend and vote is entitled to appointa proxy (whether a member or not) to attend and vote insteadof himself but a proxy so appointed has no right to speak atthe meeting. Children accompanying a member/proxywill not be allowed inside the meeting hall. Proxy formduly completed and signed should be deposited at theRegistered Office of the Company not less than forty-eight(48)hours before the commencement of the Meeting. Blankproxy form is annexed hereto.

(vi) Members having specific queries regarding accounts arerequested to deposit their queries in writing at the RegisteredOffice of the Company not less than forty-eight (48) hoursbefore the commencement of the meeting, so as to make themanagement to furnish the clarification.

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN TO THE MEMBERS THAT the30th Annual General Meeting of MAC CHARLES (INDIA)LIMITED will be held at Hotel Le Meridien, No. 28, Sankey Road,Bangalore – 560 052, on Tuesday the 31 August, 2010 at 3 p.m.to transact the following business:

ORDINARY BUSINESS

1. To receive and adopt the audited accounts of the Company forthe year ended 31 March 2010 together with the Directors’ andAuditors’ report thereon.

2. To declare dividend on equity shares for the year ended31 March 2010.

3. To appoint a Director in place of Mr. K.R. Sampath, who retiresby rotation.

4. To appoint Auditors to hold office from the conclusion of thismeeting until the conclusion of the next Annual General Meetingof the Company and to fix their remuneration.

By Order of the Board of Directors

Bangalore M.S. REDDY30 June 2010 Company Secretary

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DIRECTORS’ REPORT TO THE MEMBERS

Your Directors have pleasure in presenting the 30th Annual Reportof the Company together with the Audited Statement of Accountsfor the year ended 31 March 2010.

FINANCIAL RESULTS

Rs. in Lakhs

2009-10 2008-09

Sales Turnover 4152.08 6306.72

Other Income 2776.26 960.34

Expenditure 3707.51 4080.02

Provision for Taxation 696.04 1216.56

Profit for the year 2524.79 1970.48

Profit brought forward from previous year 555.52 551.43

Dividend includingCorporate Dividend Tax 843.02 766.38

Transfer to General Reserve 1500.00 1200.00

Profit transfer to Balance Sheet 737.30 555.52

Earning Per Share 38.54 30.08

HOTEL OPERATIONS

During the year under report, the economy witnessed a globaleconomic slowdown mainly resulted on account of unprecedentedturmoil in the banking and financial sector in developed countries.The Indian economy is also affected resulting in lower Hotel roomoccupancy and average room rate. Hence, sales turn over hasdecreased from Rs.6307 lakhs to Rs.4152 lakhs. During the currentfinancial year 2010-11, the hotel business is improving. Hence,working results will be better.

FUTURE PROSPECTS

The future of the hotel industry is entirely dependant on the state ofthe country’s economy. The outlook for the Financial Year 2010-11is improving. The demand for hotel accommodation is improving.The Company’s performance is expected to show an improvement.

FINANCE

During the year under report, the financial position of the Companyhas further been consolidated with significantly increased reservesand surplus.

DIVIDEND

The Board of Directors have recommended a dividend of Rs.11/- pershare on share capital of Rs.6.55 crores divided into 65,50,526 equityshares of Rs.10/- each. The said dividend, if approved at the ensuingAnnual General Meeting, will be paid to those shareholders whosenames appear in the Register of Members as on 31st August, 2010.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

a) Applicable accounting standards have been followed in thepreparation of annual accounts. Material departures therefrom,if any, are properly explained in the notes on accounts;

b) The Board of Directors has selected such accounting policiesand applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company at the endof the financial year and of the profit of the Company for theperiod ;

c) The Board has taken proper and sufficient care for themaintenance of adequate accounting records in accordance withthe provisions of the Companies Act for safe-guarding the assetsof the Company and for preventing and detecting fraud andother irregularities; and

d) The Annual Accounts have been prepared for the financial yearended March 31 2010 on a going concern basis.

FOREIGN EXCHANGE EARNINGS

Foreign Exchange Earnings during the year were Rs.2325 lacs whichis 56% of the Hotel Sales Turnover. The Foreign Exchange utilisationduring the year was Rs.407 lacs.

SUBSIDIARY COMPANIES

During the year under review, your Company has invested 100%share capital in Messrs. NEDSTAR HOTELS PRIVATE LIMITED(presently known as AIRPORT GOLF VIEW HOTELS & SUITESPRIVATE LIMITED w.e.f. 18th June, 2010). As required underSection 212 of the Companies Act, 1956, the Audited Statement ofAccounts, the Reports of the Board of Directors and Auditors of theSubsidiary Companies are annexed.

DUES TO SMALL SCALE UNDERTAKINGS

There are no dues payable to small scale undertakings.

CORPORATE GOVERNANCE

Members are aware that the Corporate Governance code has becomea statutory requirement as per listing guidelines framed by the StockExchanges. Members will be happy to know that their Company iscomplying with the stipulations of the new code as on date. In linewith this requirement of the code, a Corporate Governance Reportand a Management Discussion and Analysis Report of the Companyis furnished elsewhere in this Annual Report.

ENERGY CONSERVATION

Conservation of energy continues to be on top priority of themanagement. The following energy conservation measures havebeen taken:

a) During the year under report, installed one more Wind TurbineGenerator with a capacity of 2.10 MW apart from existing twonumbers of 1.50 MW each environment friendly Wind TurbineGenerators which generate electricity of about 1.15 crore unitsp.a. of green power which will be utilized partially for captiveconsumption of the Hotel and the balance units generated isbeing sold to Govt. of Karnataka.

b) an effective key-tag system is in vogue in all guest rooms toswitch off lights & power connections automatically.

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c) substantially switched over to PL lamps from conventional lampswith a view to saving energy upto 60% on lighting.

d) installed solar panels which are feeding hot water required forthe guest rooms.

e) imported and installed three highly fuel efficient screw chillersfor our AC plant.

f) replaced windows with double glazed reflective glass with aview to save power on AC consumption.

g) installed two on load tap charger transformers for stabilisingvoltage fluctuations and thereby to save power and preventdamage to electric motors and other installations.

h) thermostatic Controls, Timers and Photo Cell Switches havebeen installed wherever necessary to control powerconsumption.

i) imported and installed two temperature control systems to reducepower consumption.

j) constituted an energy conservation committee to monitor powerconsumption regularly.

Employed throughout the year :

Name Ms.Sangeeta C. Pardhanani Mr. M.S. Reddy Mr. G. Vijay

Age 41 Years 56 Years 48 years

Remuneration Rs.90,31,500/- Rs.27,03,460/- Rs.27,00,195/-

Qualification B.Com., DBM B.Com.,L.L.B., B.com.,Diploma in HotelMBIM., from London, UK, Mgmt.from Florida, USA,FCA, FCS Advance Mgmt. from Cornell

University, USA

Experience 8 Years 30 years 24 years

Date of commencementof employment 01.10.2002 13.08.1983 01.10.2005

Last Employment held Executive Director – CompanySecretary & Chief Director of Operation, HarshaMac Charles (India) Ltd. Accounts Officer, Sri Krishna Hospitality Management,

Rajendra Mills Ltd., Mysore USA

Designation Managing Director Vice President Finance and Vice President andCompany Secretary Director of Development

TECHNOLOGY ABSORPTION

In the opinion of the Board, the required particulars, pertaining totechnology absorption in terms of Rule 2 of the Companies (Disclosureof Particulars in the Report of Board of Directors) Rules, 1988 are notapplicable as hotel forms part of the service industry and the Companydoes not have any significant manufacturing operations. However,the management has been adopting the latest technology like LCD TVsystems, high speed internet installed in all the guest rooms, latesthigh speed computers, modern guest amenities, best audio-videoequipment, newest model transport vehicles for complimentarytransport of hotel guests, video conferencing facility, latest modelsof soundfree fridges in guest rooms and various latest hoteloperational equipments. Further the Hotel has been conforming tothe stringent Le Meridien’s International Standards.

PARTICULARS OF EMPLOYEES

Information under section 217(2A) of the Companies Act. 1956,read with Companies (particulars of employees) Rules, 1975, isappended below :

Particulars of employees pursuant to the provisions of Section217(2A) of the Companies Act, 1956 :

EMPLOYEES

The relationship with employees has been cordial. The total numberof persons employed by the Company is 377 as at 31 March 2010.

DIRECTORS

Mrs. Kavita C. Pardhanani, resigned from the Board of Directorsduring the year.

Your Directors place on record their appreciation for the servicesrendered by Mrs. Kavita C. Pardhanani during her tenure as Directorof your Company.

Out of the present Director, Mr. K. R. Sampath will retire by rotationat the 30th Annual General Meeting and he is not seekingre-appointment.

AUDIT COMMITTEE

The Audit Committee comprising of Mr. C.B. Pardhanani,Mr. J. Matthan and Mr. P.B. Appiah all Directors of the Companywith Mr. J. Matthan as the Chairman, discharged its duties andfunctions in consultation with the Internal and Statutory Auditors:(a) To review the adequacy of the internal control system andinternal Audit Reports and their compliance thereof: (b) Tooversee the Company’s financial reporting process and thedisclosure of its financial information to ensure that the financialstatements are correct, sufficient and credible: and (c) To reviewwith the management, the financial statements before submissionto the Board.

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AUDITORS’ REPORT ON CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the Auditor’sCertificate is given as an annexure to Directors Report.

AUDITORS

M/s. K.B. Nambiar & Associates, Chartered Accountants, retire atthe forthcoming Annual General Meeting and being eligible offerthemselves for re-appointment.

INTERNAL AUDITORS

M/s. B.P. Rao & Company, Internal Auditors have been conductingquarterly audits of all operations of the Company and their findingshave been reviewed regularly by the Audit Committee. Your Directorsnote with satisfaction that no material deviations from the prescribedpolicy and procedures have been observed.

SECRETARIAL AUDIT

As per SEBI Regulations, secretarial audit is being carried out at thespecified periods by a practicing Company Secretary. The findingsof the secretarial audit are satisfactory.

DEMATERIALISATION

The trading of Company’s shares are dematerialisation of shares hasbeen done with Central Depository Services (India) Limited (CDSL)and National Securities Depository Limited (NSDL).

ACKNOWLEDGEMENTS

Your Directors are grateful to the Shareholders for their support andco-operation extended to the Company for many years. The Directorsalso thank the Banks namely State Bank of India and State Bank ofMysore for their co-operation and support. The Directors wish toplace on record the support and encouragement received from theDepartment of Tourism, Government of India, Karnataka StateGovernment and Foreign collaborators M/s.Le Meridien. TheDirectors also acknowledge the dedicated services rendered by theofficers and all the staff of the Company.

For and on behalf of the Board

Bangalore C.B. Pardhanani30 June 2010 Chairman

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

To,THE MEMBERS OF MESSRS. MAC CHARLES (INDIA) LIMITED

We have examined the compliance of conditions of corporate governance by Mac Charles (India) Limited, for the year ended of 31 March 2010,as stipulated in clause 49 of the Listing Agreement of the said company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures andimplementation thereof, adopted by the Company for ensuring compliance of the conditions of Corporate Governance. It is neither an auditnor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied withthe conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement, except ;

(a) the Company has held only three Audit Committee Meetings during the year as against the required minimum of four Audit CommitteeMeetings in a year ;

(b) the time interval between two Board Meetings in one instance is more than four months ; and

(c) the Chairman of the Audit Committee was not present at the previous Annual General Meeting of the Company held on 30 July 2009.

We state that no investor grievance is pending for a period exceeding one month as at 31 March 2010 except in one case as per the recordsmaintained by the Company and as taken on record by the Share Transfer cum Shareholders Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectivenesswith which the management has conducted the affairs of the Company.

For K. B. NAMBIAR & ASSOCIATES Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore V. V. GABRIEL30 June 2010 Partner (M.No.213936)

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(i) (a) The Company has maintained proper records showingfull particulars including quantitative details and situationof fixed assets.

(b) The fixed assets have been physically verified by themanagement during the year and no material discrepancieswere noticed during such verification.

(c) Fixed Assets disposed off during the year were notsubstantial.

(ii) (a) Physical verification of inventory has been conducted bythe management at reasonable intervals.

(b) In our opinion, the procedures, of physical verification ofinventories followed by the management are reasonableand adequate in relation to the size of the Company andthe nature of its business.

(c) The Company is maintaining proper records of its inventory.The discrepancies noticed on physical verification of stocksas compared to book records are not material and have beenproperly dealt with in the books of account.

(iii) (a) The Company has granted an unsecured loan to its whollyowned subsidiary. The maximum amount outstandingduring the year was Rs.2,30,00,000/- and the year-endbalance of the loan is Rs.2,30,00,000/-.

We have audited the attached Balance Sheet of MESSRS.MACCHARLES (INDIA) LIMITED (‘the Company’) as at 31 March2010 and also the Profit and Loss Account and Cash Flow Statementfor the year ended on that date annexed thereto. These financialstatements are the responsibility of the company’s management.Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An auditincludes examining on a test basis, evidence supporting the amountsand disclosures in financial statements. An audit also includesassessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003,(‘the Order’) as amended, issued by the Central Government interms of sub-section (4A) of section 227 of the Companies Act,1956, (‘the Act’) we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, wereport that :

(i) We have obtained all the information and explanations, which tothe best of our knowledge and belief were necessary for thepurposes of our audit, subject to Note No.21 of Schedule No.19– Notes on Accounts – regarding non-confirmation of balances ;

(ii) In our opinion, proper books of account as required by law havebeen kept by the company so far as appears from our examinationof those books ;

(iii) The Balance Sheet, Profit and Loss Account and Cash FlowStatement dealt with by this report are in agreement with thebooks of account ;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account andCash Flow Statement dealt with by this report comply with theAccounting Standards referred to in sub-section (3C) of section211 of the Companies Act, 1956 ;

(v) On the basis of written representations received from theDirectors, as on 31 March 2010 and taken on record by theBoard of Directors, we report that none of the Directors isdisqualified as on 31 March 2010 from being appointed as aDirector in terms of clause (g) of sub-section (1) of section 274of the Companies Act, 1956 ;

(vi) In our opinion, and to the best of our information and accordingto the explanations given to us, the said accounts give theinformation required by the Companies Act, 1956 in the mannerso required and give a true and fair view in conformity with theaccounting principles generally accepted in India :

(a) in the case of the Balance Sheet, of the state of affairs of theCompany as at 31 March 2010 ;

(b) in the case of the Profit and Loss Account, of the PROFITfor the year ended on that date ; and

(c) in the case of Cash Flow Statement, of the Cash Flows forthe year ended on that date.

For K. B. Nambiar & AssociatesChartered Accountants


Bangalore V. V. Gabriel30 June 2010 Partner (M.No.213936)

REPORT OF THE AUDITORS TO THE MEMBERS

ANNEXURE TO THE AUDITORS’ REPORT DATED 30 JUNE 2010

(b) Having regard to the fact that the loan granted to its whollyowned subsidiary is interest free and unsecured and alsothat no agreement/contract is entered into with thesubsidiary, the terms and conditions of loan granted to thesubsidiary are in our opinion prima facie not prejudicialto the interests of the Company.

(c) In the absence of an agreement/contract there is nostipulation as to repayment and as such paragraph 4(iii)(c ) of the order is not applicable to the Company inrespect of repayment of the principal amount.

(d) Since there is no stipulation regarding repayment ofprincipal, paragraph 4(iii)(d) of the order is not applicableto the Company in respect of overdue amount in excess ofrupees one lakh.

(e) The Company has not taken any loans, secured orunsecured from companies, firms or parties covered in theregister maintained under Section 301 of the Act.Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Orderare not applicable.

(iv) In our opinion and according to the information and explanationsgiven to us, having regard to the Companies explanations thatsome of the items purchased are of special nature and suitable

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alternative sources are not readily available for obtainingcomparable quotations, there is an adequate internal controlsystem commensurate with the size of the company and thenature of its business with regard to purchase of inventory andfixed assets and the sale of goods and services. During thecourse of our audit, we have not observed any major weaknessin such internal control system.

(v) In respect of contracts or arrangements entered in the registermaintained in pursuance of Section 301 of the Companies Act,1956, to the best of our knowledge and belief and according tothe information and explanations given to us :

a) the particulars of contracts or arrangements referred to inSection 301 that needed to be entered in the Registermaintained under the said section have been so entered.

b) where each of such transaction is in excess of Rs.5/- Lakhs inrespect of any party, we are unable to comment whether suchtransactions have been made at prices which are reasonablehaving regard to the prevailing market prices at the relevanttime since such transactions are in respect of certain purchasesfor which comparable quotations are not available.

(vi) The Company has not accepted deposits to which the directives

issued by Reserve Bank of India and provisions of Sections58A, 58AA or any other relevant provisions of theCompanies Act, 1956 and the rules framed thereunderapply.

(vii) The Company has an internal audit system commensurate withits size and the nature of its business.

(viii) As informed to us, the Central Government has not prescribedmaintenance of cost records under Section 209 (1)(d) of theCompanies Act, 1956, for the Company.

(ix) (a) According to the records of the Company and theinformation and explanations given to us, the Company isregular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund,Employees’ State Insurance, Income Tax, Sales Tax, WealthTax, Service Tax, Customs Duty, Excise Duty, Cess andany other statutory dues with the appropriate authoritiesduring the year.

(b) To the best of our knowledge and belief and according tothe information and explanations given to us, details ofdisputed statutory dues which has not been deposited inthe case of Income Tax are given in the table below :

(x) The Company has neither accumulated loss as at 31 March2010 nor has it incurred any cash loss during the financial yearended on that date or in the immediately preceding financialyear.

(xi) The Company has not defaulted in repayment of dues tofinancial institution or bank.

(xii) According to the information and explanations given to us,and records examined by us, during the year the company hasnot granted loan or advance on the basis of security by way ofpledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified under clause(xiii) of paragraph 4 of the Order are not applicable to theCompany.

(xiv) In our opinion and according to the information andexplanations given to us, the Company is not a dealer or traderin securities.

(xv) According to the information and explanations given to us,the Company has not given any guarantee for loans taken byothers from banks or financial institutions.

(xvi) In our opinion and according to the information andexplanations given to us, the Company has not obtained anyterm loan during the year.

(xvii) According to the information and explanations given to us andon an overall examination of the balance sheet of the Company,we report that no funds raised on short term basis have beenused for long term investment by the Company.

(xviii)The Company has not made any preferential allotment ofshares during the year.

(xix) The Company has not issued any debenture during the year.

(xx) The Company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information andexplanations given to us, no fraud on or by the Company hasbeen noticed or reported during the year.

For K. B. Nambiar & AssociatesChartered Accountants


Bangalore V. V. Gabriel30 June 2010 Partner (M.No.213936)

Sl . Nature of Period to Which the AmountNo. Dues Dispute relates in Rupees Forum where the Dispute is Pending Remarks

1 Income Tax A.Y. 1997-98 9,55,691 Honourable High Court of Karnataka The amount in dispute isadjusted by the Income TaxDepartment out of refund dueto the Company

2 Income Tax A.Y.2001-02 9,54,168 Honourable High Court of Karnataka The amount in dispute isadjusted by the Income TaxDepartment out of refund dueto the Company

3 Income Tax A.Y.2007-08 14,90,801 CIT (Appeals) - III The amount in dispute isadjusted by the Income TaxDepartment out of refund dueto the Company

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SOURCES OF FUNDSShareholder's funds

Share Capital 1 6,55,32,010 6,55,32,010

Reserve and Surplus 2 191,10,07,883 174,28,30,529

Loan Funds

Secured Loans 3 1,68,36,345 1,02,95,230

Net Deferred Tax liability 4 6,31,09,904 4,61,32,234

TOTAL 205,64,86,142 186,47,90,003

APPLICATIONS OF FUNDS

Fixed Assets 5

Gross Block 110,11,78,696 97,00,64,331

Less : Depreciation 38,99,33,299 35,13,75,669

Net Block 71,12,45,397 61,86,88,662

Capital Work-in-progress 8,13,061 8,13,061

Investments 6 90,88,10,732 65,36,76,535

Current Assets, Loans and Advances

Inventories 7 60,02,670 59,03,432

Sundry Debtors 8 1,55,21,941 1,72,09,188

Cash and Bank Balances 9 3,33,60,769 2,99,53,542

Loans and Advances 10 71,88,09,479 81,32,25,333

77,36,94,859 86,62,91,495

LESS: CURRENT LIABILITIES AND PROVISIONS 11

Current liabilities 24,47,04,938 19,24,68,211

Provisions 9,33,72,969 8,22,11,539

33,80,77,907 27,46,79,750

NET CURRENT ASSETS 43,56,16,952 59,16,11,745

TOTAL 205,64,86,142 186,47,90,003

NOTES ON ACCOUNTS 19

The Schedules 1 to 11 and 19 form an integral part of Balance Sheet

In terms of our report of even date On behalf of the Board

For K.B. Nambiar & Associates M.S. Reddy C.B. PardhananiChartered Accountants Vice President Finance & Chairman(Firm Regn. No. 002313S) Company Secretary

V.V. Gabriel Sangeeta C. PardhananiPartner (M.No. 213936) Managing Director

Bangalore Bangalore J. Matthan30 June 2010 30 June 2010 Director

Schedule 2010 2009No. Rupees Rupees

BALANCE SHEET AS AT 31 MARCH 2010

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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010

Schedule 2010 2009No. Rupees Rupees





INCOME

Rooms, Restaurants, Banquets and Other services 12 41,52,07,752 63,06,71,921

Other Income 13 27,76,26,550 9,60,34,419

69,28,34,302 72,67,06,340

EXPENDITURE

Consumption of provisions, food supplies and beverages 14 4,13,48,129 4,09,66,003

Remuneration and benefits to employees 15 7,15,23,690 7,69,19,246

Maintenance, upkeep and services 16 5,20,65,285 5,57,37,726

Operating and administrative expenditure 17 9,38,41,819 12,09,02,871

Interest and financial expenses 18 5,61,291 10,47,781

Provision for Diminution in value of investments 25,95,837 46,15,158

Depreciation 4,01,19,351 3,95,22,560

Loss on Sale of Investments - Long Term 2,97,53,228 –

- Short Term 3,76,72,697 6,72,91,448

Provision for Donations 12,70,000 10,00,000

37,07,51,327 40,80,02,793

Profit Before Tax 32,20,82,975 31,87,03,547

Provision for Income Tax - Current Tax 5,50,00,000

Less : Excess Provision of earlier years 2373,716 (5,26,26,284) (11,75,00,000)

- Deffered Tax (1,69,77,670) (28,31,016)

- Fringe Benefit Tax – (13,25,000)

Profit after Tax for the Year 25,24,79,021 19,70,47,531

Profit brought forward from Previous Year 5,55,52,284 5,51,42,632

Profit available for appropriation 30,80,31,305 25,21,90,163

APPROPRIATION

General Reserve (15,00,00,000) (12,00,00,000)

Proposed Dividend (7,20,55,786) (6,55,05,260)

Corporate Dividend Tax (1,22,45,881) (1,11,32,619)

Balance Carried to Balance Sheet 7,37,29,638 5,55,52,284

Earnings per Share Basic & diluted (Face Value of Rs.10/- each) 38.54 30.08


The Schedules 12 to 19 form an intergral part of Profit and Loss account

9


2010 2009Rupees Rupees

SCHEDULES TO BALANCE SHEET

1. SHARE CAPITAL

AUTHORISED2,00,00,000 (2,00,00,000) Equity Shares of Rs.10/- each 20,00,00,000 20,00,00,000

ISSUED, SUBSCRIBED AND PAID UP65,50,526 (65,50,526) Equity shares of Rs.10/- each 6,55,05,260 6,55,05,260

Add : Forfeited Shares 26,750 26,750

6,55,32,010 6,55,32,010

2. RESERVES AND SURPLUS

Security Premium Account 1,75,11,237 1,75,11,237

1,75,11,237 1,75,11,237

General ReserveAt the commencement of the year 166,97,67,008 154,97,67,008

Add : Transfer from Profit & Loss Account 15,00,00,000 12,00,00,000

181,97,67,008 166,97,67,008

Profit and Loss Account

Surplus 7,37,29,638 5,55,52,284

7,37,29,638 5,55,52,284

191,10,07,883 174,28,30,529

3. SECURED LOANS

From BanksOver Draft 6,59,400 –

Cash Credit 1,61,76,945 1,02,95,230

1,68,36,345 1,02,95,230

The Cash Credit is secured by company's immovable property at No.28, Sankey Road,Bangalore and first charge by way of hypothecation and / or pledge of the company'sentire goods, movables and other assets present and future including documents oftitle to the goods and other assets, such as Book Debts, outstanding monies,receivables, bills, invoices, documents, contracts, insurance policies, guarantees,engagements, securities, investments and rights and uncalled capital and all machinerypresent and future and personal guarantee of one of the Directors of the Company.

Overdraft is secured by Fixed Deposit with the Bank.

4. NET DEFERRED TAX LIABILITY

Deferred Tax Liability:Accumulated Depreciation 6,45,59,369 4,89,52,474

Less : Deferred Tax Assets :Accrued Expenses deductible on payment 14,49,465 28,20,240

63,10,99,04 4,61,32,234

10


LONG TERM

TRADE - QUOTED - AT COST

1. In Fully Paid Equity Shares

Indian Hotels Company Ltd. 1/- 10000 405277 —— —— —— —— 10000 405277

TRADE - UNQUOTED - AT COST


SUBSIDIARY :

Nedstar Hotels Pvt.Ltd. 1000/- —— —— 29988 74500000 —— —— 29988 74500000

(presently known as Airport Golf View

Hotels & Suites Pvt. Ltd. w.e.f. : 25.05.2010)

NON TRADE - UNQUOTED - AT COST


Electrex (India) Ltd. 10/- 600 25040 —— —— —— —— 600 25040

4. In Fully Paid Units of Mutual Fund -

EQUITY FUND

Franklin Templeton Mutual Fund

Index Fund Nifty Plan Growth 10/- 123193.673 5000000 —— —— —— —— 123193.673 5000000

HSBC Mutual Fund

Equity Fund - Growth 10/- 1359739.304 114573800 —— —— 1359739.304 130515096 —— ——

ICICI Prudential Mutual Fund

Focused Equity Fund - Retail Growth 10/- 2000000.000 20000000 —— —— 2000000.000 20940000 —— ——

Sundaram BNP Paribas Mutual

Capex Opportunities Fund - Dividend 10/- 794146.234 20100000 —— —— —— —— 794146.234 20100000

(Value in Rupees)6. INVESTMENTS

PARTICULARS FACE AS ON 01.04.2009 BOUGHT DURING THE YEAR SOLD DURING THE YEAR AS ON 31.03.2010VALUE QUANTITY VALUE QUANTITY VALUE QUANTITY VALUE QUANTITY VALUE

.(Amount in Rs.)

GROSS BLOCK AT COST DEPRECIATION NET BLOCK

As at Additions / As at Up to For the year Up to As at As atDESCRIPTION 1.4.2009 (Disposals) 31.3.2010 31.3.2009 (Withdrawal) 31.3.2010 31.3.2010 31.3.2009

Land 33,31,65,755 – 33,31,65,755 – – – 33,31,65,755 33,31,65,755

Building 18,24,49,251 75,33,399 18,99,82,650 11,85,04,883 49,36,472 12,34,41,355 6,65,41,295 6,39,44,368

Plant & Machinery 33,89,24,629 11,76,71,898 45,65,96,527 14,38,62,205 2,64,43,350 17,03,05,555 28,62,90,972 19,50,62,424

Sanitary Fittings 1,63,85,821 – 1,63,85,821 1,04,11,750 7,98,074 1,12,09,824 51,75,997 59,74,071

Computers 87,28,094 9,43,600 96,10,994 79,75,738 6,45,687 86,15,656 99,53,38 7,52,356(60,700) (5,769)

Furniture, Fixtures& Interiors 6,35,73,645 21,91,740 6,57,65,385 5,31,49,536 37,66,298 5,69,15,834 88,49,551 1,04,24,109

Vehicles 2,68,37,136 43,90,380 2,96,71,564 1,74,71,557 35,29,470 1,94,45,075 1,02,26,489 93,65,579(15,55,952) (15,55,952)

Total 97,00,64,331 13,27,31,017 1,10,11,78,696 35,13,75,669 4,01,19,351 38,99,33,299 71,12,45,397 61,86,88,662(16,16,652) (15,61,721)

Previous Year 96,54,00,606 1,28,77,064 97,00,64,331 31,66,73,789 3,95,22,559 35,13,75,669 61,86,88,662 64,87,26,817(82,13,339) (48,20,678)

SCHEDULES TO BALANCE SHEET (Contd...,)

5. FIXED ASSETS

11


(Value in Rupees)6. INVESTMENTS (Contd....,)




Select Focus - Appreciation 10/- 505164.835 25695512 —— —— 505164.835 34703612 —— ——


Global Advantage Fund - Dividend 10/- 3000000.000 30000000 —— —— —— —— 3000000.000 30000000

UTI Mutual Fund

Top 100 Fund - Growth 10/- 246659.246 12066254 246659.246 —— 493318.492 13053207 —— ——

(earlier known as UTI Index Select Fund -

- Growth with 299485.088 units)

DEBT FUND

* Franklin Templeton Mutual Fund

Short Term Income Fund Institutional-Gr. 10/- —— —— 69273.891 100000000 —— —— 69273.891 100000000

* Pledged with Deutsche Bank

5. PORTFOLIO MANAGEMENT SERVICES

Deutsche Bank Direct Equities —— 205438325 —— 1787171 —— 100000000 —— 189572318

Reliance Asset Management - PMS —— 892370 —— —— —— 890560 —— ——

6. In Fully Paid Units of

Real Estate Venture Capital Fund

Kotak Real Estate Fund 1 lac 239.480 23948229 —— —— 19.47 2099249 220.010 22001571

Pru.ICICI India Advantage Fund - III 100/- 435000.000 43500000 65000.000 6500000 —— —— 500000.000 50000000

NON-TRADE - QUOTED - AT COST


Ballarpur Industries 2/- 3000 97092 —— —— —— —— 3000 97092

BHEL 2/- —— —— 2000 4419595 2000 4699849 —— ——

Bombay Dyeing & Mfg. Company Ltd. 10/- 1000 469118 —— —— —— —— 1000 469118

Britannia Industries Ltd. 10/- 431 752843 —— —— —— —— 431 752843

EMCO Ltd. 2/- —— —— 83970 7334559 83970 7954335 —— ——

Essel Propack Ltd. 2/- 10000 817458 —— —— —— —— 10000 817458

Gateway Distriparks Ltd. 10/- —— —— 10000 1152237 10000 1203985 —— ——

GMR Infrastructure 1/- 25000 3687245 15000 —— 10000 1747520 30000 1975203

Godrej Consumer Products Ltd. 1/- 4000 717538 —— —— —— —— 4000 717538

Great Offshore Ltd. 10/- 500 523713 —— —— —— —— 500 523713

Gujarat Alkalies and Chemicals Ltd. 10/- 2000 452181 —— —— —— —— 2000 452181

HCL TECH 2/- 4000 1284165 —— —— —— —— 4000 1284165

Housing Development Finance Corporation 10/- 1750 3714746 —— —— 1000 2587124 750 1532647

HOV Services 10/- 5000 995820 —— —— —— —— 5000 995820

ICICI Bank 10/- 11250 6228112 10000 8123673 18000 14814073 3250 2594524

Industrial Development Finance Corporation 10/- 1000 215714 —— —— —— —— 1000 215714

Indiabulls Financial Services 2/- 5000 5049787 —— —— —— —— 5000 5049787

Indiabulls Securities 10/- 5000 —— —— —— —— —— 5000 ——

Infosys Technology 5/- —— —— 4000 9622168 4000 10396160 —— ——

Jaiprakash Associates 2/- 750 326663 375 —— —— —— 1125 326663

Jindal Steel and Power Ltd —— —— 2000 1341024 1000 674857 1000 614970

Lakshmi Overseas Industries 2/- 1994 540589 —— —— —— —— 1994 540589

Larsen & Tourbro 2/- 5000 8276444 —— —— 3000 5004802 2000 2898929

Mastek Ltd. 5/- 1800 1455550 —— —— —— —— 1800 1455550

Mercator Lines 1/- 1149 132451 —— —— —— —— 1149 132451

NHPC 10/- —— —— 25571 920556 —— —— 25571 920556

NTPC 10/- 1500 359027 —— —— —— —— 1500 359027

Polaris Software Lab Ltd. 5/- 2350 361800 —— —— —— —— 2350 361800

Purvankara Projects 10/- 38651 9790456 5000 466104 —— —— 43651 10256560

Radha Madhav Corporation 10/- 10000 851752 —— —— —— —— 10000 851752

Ratnamani Metals & Tubes Ltd 2/- —— —— 10000 1132478 —— —— 10000 1132478

12


Reliance Communications Ltd. 5/- 750 517406 —— —— —— —— 750 517406

Reliance Industries Ltd. 10/- 2643 5539928 85143 86685428 32143 35354550 55643 25725621

Silverline Technologies Ltd. 10/- 380 1401191 —— —— —— —— 380 1401191

Silverline Animation Technologies Ltd. 10/- 152 —— —— —— —— —— 152 ——

Sobha Developers Ltd. 10/- 26433 13704356 —— —— —— —— 26433 13704356

Sterlite Industries Ltd., 2/- —— —— 5000 4001576 2000 1713894 3000 2318390

Subex Azure Ltd. 10/- 4000 1875529 —— —— —— —— 4000 1875529

Supreme Industries Ltd. 10/- 5000 1182053 —— —— 5000 1391412 —— ——

Tata Consultancy Services Ltd. 1/- 6000 6596641 10000 2963595 12000 8277317 4000 2963595

Tata Steel 10/- —— —— 4257 2573524 2257 1377826 2000 1124625

Wockhardt Ltd. 5/- 1000 411206 —— —— —— —— 1000 411206

8. In Fully Paid Non Convertible Debentures

Britannia Industries Ltd. 170/- —— —— 431 —— —— —— 431 ——

SHORT TERM -

NON TRADE - UNQUOTED - AT COST

9. In Fully Paid Units of Mutual Fund -

DEBT FUND

Deutsche Asset Management

Premier Bond Institutional Plan - Growth 10/- 3454418.650 35475498 —— —— 3454418.650 35840975 —— ——


Cash Opportunities Regular Plan - Growth 10/- —— —— 3045578.360 35840975 3045578.360 36519380 —— ——


Cash Opportunities Institutional Plan - Gr. 10/- —— —— 23954972.576 278419380 6000741.152 70000000 17954231.424 209284512


Treasury Fund Investment Institutional-Gr. 10/- —— —— 12697493.831 130000000 —— —— 12697493.831 130000000


Flexible Income Plan - Growth 10/- —— —— 8806285.545 338212715 8806285.545 342376461 —— ——


Institutional Liquid Plan-Super Instnl. - Gr 10/- 3495557.434 45080851 9910446.823 131500000 13406004.257 177425065 —— ——

660529730 918259765

Less : Provision for diminution

in value of Investments 6853195 9449033

653676535 1227496758 1061561309 908810732

Aggregate amount of Company's Quoted

Investments is Rs.8,77,76,324/- (Rs.7,87,33,851/-)

Total Market value of Quoted Investments

as on 31 March 2010 is Rs.10,05,12,545/- (Rs.2,79,45,886/-)

Aggregate amount of Company's Unquoted

Investments is Rs.83,04,83,441/- (Rs.58,17,95,879/-)

(Value in Rupees)


6. INVESTMENTS (Contd....,)


13




7. INVENTORIESProvisions, Food supplies and Beverages 31,09,479 31,32,554

Other stores and operational supplies 28,93,191 27,70,878

60,02,670 59,03,432

8. SUNDRY DEBTORSUNSECURED - CONSIDERED GOOD

Debts outstanding for a period exceeding six months 2,14,427 3,00,437

Other debts 1,53,07,514 1,69,08,751

1,55,21,941 1,72,09,188

9. CASH AND BANK BALANCESCash on hand 13,25,805 12,35,787

Balances with Scheduled BanksOn Current account 3,01,18,964 2,70,30,179

On deposit account 19,16,000 16,87,576

3,33,60,769 2,99,53,542

10. LOANS & ADVANCES

UNSECURED - CONSIDERED GOOD

Loans to Subsidiary Company 2,30,00,000 –

Advances recoverable in cash / kind / for value to be recd. 65,55,69,347 68,56,24,492

Advance Income Tax 3,26,60,279 11,98,07,467

Advance FBT 27,059 –

Deposits 75,52,794 77,93,374

71,88,09,479 81,32,25,333

11. CURRENT LIABILITIES & PROVISIONS

A) Current Liabilities

Sundry Creditors:

a. Dues to Micro and Small Enterprises – –

b. Others 3,55,35,723 2,95,14,441

Unclaimed Dividend 2,81,45,684 2,46,39,951

Due to Directors 56,56,611 1,20,32,689

Other Liabilities 17,53,66,920 12,62,81,130

A 24,47,04,938 19,24,68,211

B) Provisions

Proposed Dividend 7,20,55,786 6,55,05,260

Corporate Dividend Tax 1,22,45,881 1,11,32,619

Provision for Income Tax 25,39,537 –

Provision for Fringe Benefit Tax 1,55,980 1,23,696

Provision for Gratuity 9,05,829 3,07,370

Provision for Leave encashment 54,69,956 51,42,594

B 9,33,72,969 8,22,11,539

A+B 33,80,77,907 27,46,79,750

14


12. ROOMS, RESTAURANTS, BANQUETS AND OTHER SERVICES

Rooms 28,49,49,580 46,77,15,951

Food, Beverage & Banquets 10,83,84,310 12,80,08,411

Other Services 2,18,73,862 3,49,47,559

41,52,07,752 63,06,71,921

13. OTHER INCOME

Interest received [TDS : Rs.1,29,758/- (Rs.19,885/-) ] 90,23,462 13,35,476

Dividend Income (Non-Trade) 70,75,089 27,86,272

Profit on sale of Fixed Assets 5,50,000 83,67,825

Profit on sale of investments - Short term 3,10,95,295 58,75,213

- Long term 12,81,25,214 77,73,000

Profit on Relinquishment of rights in immovable Properties 6,49,25,000 3,72,13,120

Income Rent [ TDS : Rs.13,46,368/- (Rs.15,83,441/-) ] 81,85,800 71,99,973

Income Licence Fees [ TDS : Rs.7,52,986/- (Rs.9,12,824/-) ] 38,82,256 41,58,126

Sale of Electricity Genarated from Wind Turbine Genarators 2,01,15,184 1,96,92,357

Liabilities Written Back 33,11,278 7,82,923

Miscellaneous Income 13,37,972 8,50,134

27,76,26,550 9,60,34,419

14. CONSUMPTION OF PROVISIONS, SUPPLIES & BEVERAGES

Opening Stock 31,32,554 29,28,930

Add : Purchases 4,13,25,054 4,11,69,627

4,44,57,608 4,40,98,557

Less : Closing Stock 31,09,479 31,32,554

4,13,48,129 4,09,66,003

15. REMUNERATION & BENEFITS TO EMPLOYEES

Salaries, Wages & Bonus 6,12,32,091 6,89,63,146

Contribution towards provident & other funds 45,38,701 50,28,669

Gratuity 16,19,087 4,44,193

Welfare Expenses 38,06,448 24,83,238

Unavailed Leave entitlement 3,27,363 –

7,15,23,690 7,69,19,246

16. MAINTENANCE, UPKEEP AND SERVICES

Guest Accomodation Board and Kitchen 71,27,512 85,44,400

Linen, Uniforms & Laundry 66,51,683 68,42,290

Repairs & Maintenance

Building 1,18,90,937 1,73,65,659

Plant & Machinery 1,06,90,086 1,00,50,983

Interiors, Furniture, Furnishings & others 89,26,944 61,36,579

Housekeeping expenses 32,03,709 27,39,767

Music, Entertainment & Banquet Expenses 35,74,414 40,58,048

5,20,65,285 5,57,37,726


SCHEDULES TO PROFIT AND LOSS ACCOUNT

15


17. OPERATING & ADMINISTRATIVE EXPENDITURE

Power & Fuel 2,91,47,333 3,07,99,861

Water 36,23,206 46,53,853

Commission to Travel & Other Agencies 38,25,833 84,20,172

Postage & Telephones 38,08,468 55,62,616

Printing & Stationery 22,19,868 27,35,180

Sales & Promotional Expenses 5,43,870 4,03,361

Administrative & General Expenses 91,78,350 1,29,16,921

Travel & Conveyance 28,47,022 39,22,201

Rent 27,06,930 26,62,995

Rates & Taxes 60,72,469 54,24,466

Insurance 17,48,002 17,30,838

Royalty 1,25,71,976 2,09,44,529

Freight & Transport 1,52,123 2,21,398

Professional & Consultancy fees 69,73,183 53,69,922

Miscellaneous Expenses 6,01,388 4,95,427

Foreign Currency Exchange Fluctuations 2,23,655 1,76,479

Payment to Auditors

Audit Fee 2,20,214 2,00,195

Tax Audit Fee 78,742 72,921

Other Services 39,901 50,281

Reimbursement of Expenses 19,286 15,455

Directors Sitting Fees 1,10,000 1,60,000

Commission to Chairman & Managing Director 71,30,000 1,39,63,800

9,38,41,819 12,09,02,871

18. INTEREST & FINANCIAL EXPENSES

Cash credit / over draft 3,67,497 7,52,851

Bank Charges 1,93,794 2,94,930

5,61,291 10,47,781


SCHEDULES TO PROFIT AND LOSS ACCOUNT (Contd...,)

16


SCHEDULE TO BALANCE SHEET AND PROFIT AND LOSS ACCOUNT (Contd...,)

19. NOTES ON ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES :

The accounts have been prepared on historical cost convention under mercantile system of accounting and generally complies withmandatory accounting standards.

a. Fixed Assets :

Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.In respect of major projects involving construction, related pre-operational expenses form part of the value of the assets capitalized.

b. Depreciation :

Depreciation is provided on straight line method on buildings at triple the rates and on other fixed assets at double the rates specifiedin Schedule XIV to the Companies Act, 1956, based on technical evaluation.

c. Impairment of Assets :

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on Internal /external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. Therecoverable amount is greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flowsare discounted to the present value. A previously recognized impairment loss is further provided or reversed depending on changesin circumstances.

d. Investments :

i. Current Investments are stated at lower of cost and fair value.

ii. Long Term Investments are stated at cost. However provision for diminution is made to recognize a decline, other thantemporary in the value of the investments.

e. Inventories :

i. To value inventories of provisions, food supplies, crockery, cutlery, glassware, beverages, stores and operational supplies atcost on Weighted Average Method. Cost includes freight and other incidental expenses.

ii. To charge to revenue the value of crockery, cutlery and glassware at the time of first issue.

f. Miscellaneous Expenditure :

To amortize the preliminary expenses and other deferred revenue expenditure over a period of 10 years.

g. Foreign Currency Transactions :

i. Transactions in foreign currencies are accounted at the average exchange rate prevailing on the date of transaction.

ii. To account for gain or loss on foreign exchange rate fluctuations relating to assets and liabilities as at the date of the BalanceSheet at the convertible rate of exchange prevailing on that date.

iii. To account for all exchange difference arising form foreign currency transactions in the Profit and Loss Account.

h. Revenue Recognition :

i. Room revenue is recognized on actual occupancy and is net off, of cost of complimentary airport pick-up and drop.

ii. Food and Beverage at the point of supply.

iii. Other services on rendering such services.

iv. Sale of Electricity generated from Wind Turbine Generators is recognized on the basis of electricity units metered and invoiced.

i. Employee Benefits :

i. Provident Fund :

The Company contributes to the statutory provident fund of the Regional Provident Fund Commissioner, in accordance withEmployees provident fund and Miscellaneous Provisions Act, 1952. The plan is a defined contribution plan and contributionpaid or payable is recognized as an expense in the period in which the employee renders service.

ii. Gratuity :

Gratuity is a post employment benefit and is defined benefit plan. The liability recognized in the balance sheet represents thepresent value of the defined benefit obligation at the balance sheet date less the fair value of plan assets together with adjustmentsfor unrecognized actuarial gains or losses and past service costs. Independent actuaries using the projected unit credit methodcalculate the defined benefit obligation annually.

iii. Leave Encashment :

Provision for unavailed leave to the credit of the employees at the end of the year is made on the basis of the actuarial valuation.

17


j. Taxation :

Current Tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxableincome and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred Tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is virtual certainty thatsufficient future taxable income will be available against which such deferred tax assets can be realized.

2. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expense for the year are as under:

2010 2009

Employer’s Contribution to Provident Fund Rs.33,38,192/- Rs.34,52,100/-

Defined Benefit Plan

The employees’ gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined basedon actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit ofemployee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment isrecognized in the same manner as gratuity.

I. Reconciliation of opening and closing balances of Defined Benefit obligation(Rs. in Lakhs)

Gratuity Leave Encashment

2010 2009 2010 2009

Defined Benefit obligation at beginning of the year 132.85 132.85 55.49 55.49

Current Service Cost 18.70 14.32 6.03 8.56

Interest Cost 10.09 8.84 4.13 3.88

Actuarial (gain) / loss (1.41) (9.46) (3.23) (16.52)

Benefits paid (13.57) (13.27) (7.73) (0.36)

Defined Benefit obligation at year end 146.66 133.28 54.70 51.42

II. Reconciliation of opening and closing balances of fairvalue of plan assets :

Fair value of plan assets at beginning of the year 130.20 118.20

Expected return on plan assets 10.24 9.51

Actuarial gain/ (loss) 1.62 1.07

Employer’s contributions 9.11 14.69

Benefits paid (13.57) (13.27)

Fair value of plan assets at year end 137.60 130.20

Actual return on plan assets 11.86 10.58

III. Reconciliation of fair value of assets and presentvalue of obligation :

Fair value of plan assets 137.60 130.20 – –

Present value of obligation 146.66 133.28 54.70 51.42

Amount recognized in Balance Sheet 9.06 3.08 54.70 51.42


18


(Rs. in Lakhs)

Gratuity Leave Encashment

2010 2009 2010 2009

IV. The amounts recognized in the Profit andLoss Account are as follows :

Current Service Cost 18.70 14.32 6.03 8.56

Interest Cost 10.09 8.84 4.13 3.88

Expected return on plan assets (10.24) (9.51) – –

Actuarial (gain) / loss (3.04) (10.53) (3.23) (16.25)

Net Cost 15.52 3.11 6.93 (3.71)

Amount % invested Amount % invested

V. Composition of Plan Assets :

Insurance Managed Funds 137.60 100 % 130.20 100%

VI. Actuarial assumptions :

Interest rate 8% 7% 8% 7%

Discount rate (per annum) 8% 7% 8% 7%

Expected rate of return on plan Assets (per annum) 8% 8% 0% 0%

Rate of escalation in salary (per annum) 10% 10% 10% 10%

Attrition rate 5% 5% 5% 5%

Retirement Age 58 58 58 58

3. Disclosure required by Clause 32 of the Listing Agreement :

The Company has advanced interest free loan of Rs.2,30,00,000/- to its 100% subsidiary company namely, Messrs. Nedstar HotelsPrivate Limited, Kochi.

4. Advances recoverable in cash / kind / for value to be received includes Rs.54,05,04,712/- (Rs.49,27,10,071/-), being advance given forinvestments in Immovable Properties.

5. The Company has entered into an agreement for purchase of immovable property being commercial office space of 58000 sq.ft.with the Developer in Bangalore. Towards this, an advance of Rs.35 Crores has been paid. Subsequently, there was a delay incommencement of the project. The above referred agreement entitles the Company to take appropriate action with regard to thisagreement for which the consent of the developer is deemed to have been given. Accordingly, the Company relinquished its rights tothe extent of 29000 sq.ft. in the previous year and during the year the Company has decided to relinquish its balance rights in the saidagreement to the extent of 29000 sq.ft. for a consideration of Rs.23,99,25,000/- of which a sum of Rs.6,49,25,000/- has already beenreceived by the Company.

6. The Company has commissioned 2.10 MW Wind Turbine Generator on 30.03.2010 which is generating power for the Company’s captiveconsumption.

7. Liabilities written back of Rs.33,11,278/- disclosed in Schedule No.13 – Other Income, is after netting off irrecoverable advances ofRs.33,23,000/- written off during the year.

8. Considering the nature of operations of the Company, it is not practicable to give quantitative details of turnover and consumption interms of the requirement under Part–II of Schedule–VI to the Companies Act, 1956.

9. Prior period items debited/credited to Profit and Loss Account: 2010 2009Rs. in lakhs Rs. in lakhs

Prior period expenses

Commission on sales – 5.88

R & M Computers – 3.88

Laundry Expenses 5.07 –


19



2010 2009Rs. in lakhs Rs. in lakhs

10. a. Computation of Net Profit (in accordance with Section 349 read withSection 309(5) and Section 198 of the Companies Act, 1956)

Profit for the year 2524.79 1970.48

Add : Provision for Taxation 696.04 1216.56

Wealth Tax 0.37 0.64

Depreciation Charged 401.19 395.22

Commission to the Chairman and the Managing Director 71.30 139.64

Remuneration to Managing Director 36.84 36.84

Loss on Sale of Investments 674.26 672.91

Provision for Diminution in value of Investments 25.96 46.15

4430.75 4478.44

Less : Depreciation under Section 350 401.19 395.22

Profit on Sale of Investments 1592.21 136.48

Profit on Sale of Fixed Assets 5.50 83.68

Profit on relinquishment of rights in immovable properties 649.25 2648.15 372.13 987.51

1782.60 3490.93

Commission @ 1% of the above payable to the Chairman and3% to the Managing Director included under the head“Operating and Administrative Expenditure” 71.30 139.64

b. Managerial Remuneration to the ‘Chairman’ and ‘Managing Director’

Remuneration to the Managing Director 36.84 36.84

Commission to the Managing Director 53.48 104.73

Commission to the Chairman 17.82 34.91

108.14 176.48

11. Earnings in Foreign Exchange 2325.49 4454.35

12. Expenditure in Foreign Currency :

Royalty 125.72 165.89

Sales Promotion and General Expenses 81.97 118.30

Agents Commission for Room Bookings 7.54 30.40

13. CIF Value of Imports :

Stores, Components and Spare Parts 137.49 156.60

Capital Goods 54.37 96.70

14. Information as per Order No.46/22/98 CL III Dated 24 February 1998,issued by the Ministry of Finance, Department of Company Affairs :

a. Income From :

i. Wines and Liquor 90.00 89.47

ii. Telephone and Telex 76.75 91.53

b. Consumption of :

i. Provision, Beverages (excluding Wine and Liquor) 369.17 374.07

ii. Wine and Liquor 44.31 35.59

20



Name of the TransactingRelated party

Relationshipbetween

the transacting party

Volume oftransactionsduring theYear (Rs.)

AmountOutstanding

as on 31.3.2010(Rs.)

Payable (P)OR

Receivable (R)

Nature oftransactions

Kapi Investment Ink Limited Overseas Body Dividend 8,00,000 Nil NilCorporate (3,56,40,760) (Nil) (Nil)

Mr.C.B.Pardhanani Chairman Commission 17,82,500 18,24,584 (P)based on profit (34,90,500) (35,35,547) (P)

Dividend 4,48,42,260 Nil Nil(1,00,01,500) (Nil) (Nil)

Mrs.Kavitha C.Pardhanani Director Dividend Nil Nil Nil(25,000) (Nil) (Nil)

Ms.Sangeeta C.Pardhanani Managing Director Dividend 32,42,500 Nil Nil(32,17,500) (Nil) (Nil)

Remuneration 36,84,000 Nil Nil(36,84,000) (Nil) (Nil)

Commission based 53,47,500 38,32,027 (P)on profit (1,04,72,850) (84,97,142) (P)

C Pardhanani’s Education Trust Trust in which Chairman Donation 7,00,000 Nil Nilof the Company is a trustee (6,00,000) (Nil) (Nil)

Messrs. M. K. Trading F.Z.E., A company in which the Purchase of Hotel 90,18,389 69,96,196 (R)Dubai, UAE Chairman of the Company Equipments (goods in transit)

is a shareholder

Mr. M. B. Pardhanani Related to Director Dividend 6,02,000 36,72,200 (P) (Under dispute(6,02,000) (30,70,200) and subjudice)

Mrs.Uma M. Pardhanani Related to Director Dividend 10,25,000 62,52,500 (P) (Under dispute(10,25,000) (52,27,500) and subjudice)

Ms.Arti M. Pardhanani Related to Director Dividend 3,00,000 18,30,000 (P) (Under dispute(3,00,000) (15,30,000) and subjudice)

(B) Transaction with Related Parties:

15. Dividends remitted in Foreign Currency to Non Resident Shareholders Rs.4,56,42,260/- (Rs.4,56,42,260/-).

Number of Non Resident Shareholders Number of Shares held by them on which Dividends remitted

2 (2) 4564226 (4564226)

16. Related Party Disclosures :

(A) Related Parties and their Relationships :

(I) Subsidiary :

Nedstar Hotels Private Limited

(II) Others :

1. Kapi Investment Ink Limited, Mauritius, Shareholder.

2. M.K.Trading F.Z.E., Dubai, UAE a Company in which Chairman of the Company is a shareholder.

3. C. Pardhanani’s Education Trust, a Trust in which the Chairman of the Company is a Trustee.

4. Pardhanani International Investments } a Private Company in which the Chairman of the Company is a DirectorAnd Holdings Private Limited } and Managing Director of the Company is a Director and shareholder.

5. Pardhanani International Properties } a Private Company in which the Chairman of the Company is a DirectorPrivate Limited } and Managing Director of the Company is a Director and shareholder.

6. Sanko Properties Private Limited } a Private Company in which the Chairman of the Company is a Director and Managing Director of the Company is a Director and shareholder.

21


17. Diclosure as per Accounting Standard 29 :(In Rupees)

Srl. Particulars Balance Additional Provision BalanceNo. as at Provision Reversed/utilised as at

01.04.2009 made during the year during the year 31.03.2010

1. Provision for Gratuity 3,07,370 5,98,459 – 9,05,829

2. Provision for Leave Encashment 51,42,594 3,27,363 – 54,69,957

3. Proposed Dividend 6,55,05,260 65,50,526 – 7,20,55,786

4. Corporate Dividend Tax 1,11,32,619 11,13,262 – 1,22,45,881


18. Contingent Liabilities :

a) Penalty claim from Central Excise against which Appeal is pending beforeCustoms, Excise, Service Tax Appellate Tribunal – 3,89,276

b) Disputed Income Tax Liability against which Appeals are pending

(i) Assessment Year 1997-98 9,55,691 9,55,691

(ii) Assessment Year 2001-02 9,54,168 1,62,10,958

(iii) Assessment Year 2007-08 14,90,801 –

19. Estimated amount of contract remaining to be executed on capital account not providedfor Rs. 20.94 lacs (Rs.146.45 lacs)

20. In the absence of information as regard to the status / classification of the Relevantenterprises into Micro, Small and Medium Enterprises, information as Required underNotification No. G.S.R 719[E] dated 16.11.2007 issued by the Department of CompanyAffairs in respect of the total amount payable at the end of the year to the SundryCreditors could not be disclosed.

21. Confirmation of balances has not been received from parties covered underSundry Debtors, Loans and Advances and Current Liabilities.

22. Earnings Per Share has been computed as under :2010 2009

Rupees in Lakhs Rupees in Lakhs

Net Profit 2524.79 1970.48

Weighted Average Number of Equity Shares Outstanding 6550526 6550526

Earnings Per Share in rupees – Basic and Diluted (Face Value of Rs.10/- each) 38.54 30.08

23. Previous year’s figures have been regrouped / rearranged wherever necessary.


22


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010PARTICULARS 2010 2009

(Rs. in ‘000s)





A) CASH FLOW FROM OPERATING ACTIVITIES :Net profit before tax & Extraordinary Items 32,20,83 31,87,03Adjustment for :Depreciation 4,01,19 3,95,22Profit on sale of fixed assets (5,50) (83,68)Profit on sale of investments (15,92,21) (1,36,48)Loss on sale of investments 6,74,26 6,72,91Provisions for diminution in value of Investment 25,96 46,15Dividend received (70,75) (27,86)Interest Paid 3,67 7,53Profit from relinquishment of rights in immovable properties (6,49,25) (3,72,13)Operating profit before working capital changes 20,08,20 36,88,69Adjustment for :Trade and other receivables 7,97,78 1,01,63Inventories (99) 3,23Trade Payables 5,31,63 5,94,98Cash generated from operations 33,36,62 42,88,53Direct Tax (paid)/refund 3,70,66 (11,94,02)Net Cash from/(used) in Operating Activities 37,07,28 31,94,51

B) CASH FLOW FROM INVESTING ACTIVITIES :

Loan to subsidiary (2,30,00) –Purchase of Fixed assets (13,27,31) (1,28,77)Sale of Fixed assets 6,05 1,17,61Advance towards Investment in Properties (22,27,95) (43,32,85)Purchase of Investments (1,22,74,97) (99,73,56)Sale of Investments 1,06,15,61 99,35,96Proceeds from relinquishment of rights in immovable properties 23,99,25 3,72,13Dividend Received 70,75 27,86Capital work in progress – (4,20)Net Cash from/(used) in Investing Activities (29,68,57) (39,85,82)

C) CASH FLOW FROM FINANCING ACTIVITIES

Dividend Paid including Corporate Dividend Tax (7,66,38) (7,66,38)Interest paid (3,67) (7,53)Increase in cash credit / overdraft 65,41 1,02,19Net cash from/(used) in Financing Activities (7,04,64) (6,71,72)

Net increase / (decrease) in cash/cash equivalent 34,07 (14,63,03)Opening cash / cash equivalent 2,99,54 17,62,57Closing cash / cash equivalent *3,33,61 *2,99,54*includes cash and cash equivalants, being amounts lying in the unpaiddividend accounts which are not available for use by the companyamounting to Rs.2,81,46 (Rs.2,46,40)

23


Sl.No

Name of Director Category No. ofBoard

MeetingsAttended

LastAGM

attended

No. ofCommittee

Member

No. ofChairmanship

in Board /Committee

No. ofOther

Directorships

(Public LtdCompanies)

No. ofOther

Directorships

(Private Ltd.Companies)

1. Mr. C.B. Pardhanani Non- Executive 4 YES 3 2 NONE 4 4484226

2. Mr. J. Matthan Independent 5 NO 3 2 NONE 1 200Non- Executive

3. Mr. K.R.Sampath Independent 4 YES NONE NONE NONE NONE –Non- Executive

4. Mr. P.B. Appiah Independent 6 YES 2 NONE 1 NONE –Non- Executive

5. Mrs. Kavita C. Non-Executive 1 NO NONE NONE NONE 4 –Pardhanani

6. Ms. Sangeeta C. Executive 6 YES NONE NONE NONE 4 324250Pardhanani

None of the Directors is a Member of more than ten Board-level Committees, or a Chairman of more than five such Committees, as required underclause 49 of the listing agreement.

Number ofSharesHeld

CORPORATE GOVERNANCE REPORT

COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

Corporate Governance is the social, legal and economic process bywhich companies function and are held accountable. Messrs.Mac Charles (India) Ltd., is committed in implementing corporategovernance in true letter and spirit, maximizing shareholder valueand paving way for good partnership and alliances. The companybelieves in having a long term partnership with investors by havingtransparency and fairness in the dealings and placing anuncompromising emphasis on integrity and regularity of compliance.

The functions of the Board of Directors and the executivemanagement are well defined and are distinct from one another.The Chairman of the company is a non-executive Director. Morethan one-half strength of the Board of Directors is independent.Various (presently three) Committees of the Board of Directors,consist of non-executive Directors and have been formed to overseethe functions of the executive management and impartprofessionalism to the Board.

BOARD OF DIRECTORS

The Company has an appropriate mix of executive and independentdirectors to maintain the independence of the Board and to separate theBoard functions of governance and the executive management. Duringthe year the Board comprised of Chairman, one Managing Director andthree Non-Executive Directors who are independent Directors. Duringthe year, Mrs. Kavita C. Pardhanani, Director of the Company hasresigned as a Director with effect from 23rd June 2009.

Board Meetings are scheduled well in advance. Agenda papersalong with explanatory notes are distributed in a timely manner toBoard members. The Board meets at least once in every quarter toreview the quarterly financial results and discuss issues of import.During the year under review six Board Meetings have taken placeon 27 April 2009, 23 June 2009, 30 July 2009, 4 September 2009,30 October 2009, and 17 March 2010. As per Clause 49 of theListing Agreement, the gap between two Board Meetings shouldnot exceed four months. However, in one occasion, the gap betweentwo Board Meetings was more than four months as two Directorsof the Board were travelling abroad.

Details of attendance of each Director at various meetings of the company and their Directorship held at other corporate bodies are as follows:

COMMITTEES OF THE BOARD

The following committees of the Board of Directors of the Company have been constituted :

a) AUDIT COMMITTEE

The Company has complied with the requirements of Clause 49 of the Listing Agreement of the Stock Exchange and Section 292A of theCompanies Act, 1956 as regards composition of Audit Committee.

During the year three meetings of the committee were held on 23 June 2009, 20 October 2009, and 18 February 2010. The Composition ofthe Audit Committee as on 31st March 2010 and the attendance of members at the meeting of the Audit Committee held during the financialyear 2009-2010 are as follows :

Name of the Directors Designation Category No. of meeting attended

Mr. J. Matthan Chairman Independent - Non-Executive 3

Mr. C. B. Pardhanani Member Non – Executive 1

Mr. P. B. Appiah Member Independent - Non-Executive 3

Mr.J. Matthan, Chairman of Audit Committee is a former Chairman of LIC with a wide experience in finance and administration.The Committee regularly keeps a watch on the adequacy of internal control systems. It reviews the company’s financial reporting systems,the monthly and quarterly financial results, half yearly results and ensures that the financial statements prepared by the company give a true

24


and fair view of the affairs of the company. Mr. J. Matthan, Chairman of Audit Committee, could not attend the last Annual General Meetingheld on 30th July 2009 due to ill-health and for the same reason the Company held only three Audit Committee Meetings during the year,instead of holding at least four Audit Committee Meetings as per the requirements of the Clause 49 of the Listing Agreement.

b) SHARE TRANSFER & SHAREHOLDERS GRIEVANCE COMMITTEE

This committee comprises of Mr. C. B. Pardhanani – Chairman and Mr. J . Matthan, who is an independent and Non-executive Director.The committee approves and monitors transfers, transmissions of shares, transposition of names, and investigates and directs redressal ofshareholders’ grievances. Share transfers are processed in not more than a month’s time. The Committee endeavors to attend to theinvestors’ grievances / correspondences within a period of fortnight from the date of receipt of the same, except in cases which areconstrained by disputes or legal impediments.

Compliance Officer : Mr. M. S. REDDY, Company Secretary

Communication Address : No. 28, Sankey Road, P.B. No. 174, Bangalore - 560 052.

Details as to the shareholders complaints received and pending for a period of more than 30 days is given below:

NATURE OF COMPLAINT OPENING NO. OF COMPLAINTS NO. OF COMPLAINTS NO. OF PENDINGBALANCE OF RECEIVED RESOLVED TO COMPLAINTSCOMPLAINTS DURING THE YEAR THE SATISFACTION

With regard to share transfer/Transmission/ Transposition/ 1 29 29 1Dividend / Annual Reports /Dematerialization etc.,

c) REMUNERATION COMMITTEE :

This committee comprises of Mr. J. Matthan – Chairman of Remuneration Committee and Mr. C. B. Pardhanani and Mr. P. B. Appiah asMembers of the Committee. No stock option has been offered to the Diretors or Executives or Staffs of the Company. The remunerationpolicy of the Company is based on individual employee’s merit and performance in particular and the Company’s working results in general.

Details of remuneration disbursed to Directors, during the Financial Year 2009-2010 are as under : (In Rupees)

Srl.No. Name of the Director Sitting Fees Professional Fees Remuneration Commission

1. Mr. C.B. Pardhanani – – – 17,82,5002. Mr. J. Matthan 40,000 – – –3. Mr. K.R. Sampath 20,000 – – –4. Mr. P.B. Appiah 45,000 3,44,000 – –5. Mrs. Kavita C Pardhanani 5,000 – – –6. Ms. Sangeeta C Pardhanani – – 36,84,000 53,47,500

1,10,000 3,44,000 36,84,000 71,30,000

NON-MANDATORY REQUIREMENTS

The Chairman of the Company, who is a Non-Executive Director, is devoting considerable time and energy towards the success of theCompany and hence 1% commission based on profit is paid. He is entitled to maintain a Chairman’s Office and is allowed to reimbursementof expenses incurred in performance of his duties.

GENERAL BODY MEETING

The Company has held last three AGM’s as per the details furnished below :

Financial Year (ended) Date Time Venue No. of SpecialResolutions passed

31 March 2007 28 September 2007 3:00 p.m. Hotel Le Meridien, 3No.28, Sankey Road, Bangalore – 560 052.

31 March 2008 27 September 2008 3:00 p.m. Hotel Le Meridien, –No.28, Sankey Road, Bangalore – 560 052.

31 March 2009 30 July 2009 3:00 p.m. Hotel Le Meridien, –No.28, Sankey Road, Bangalore – 560 052.

No Postal Ballot was conducted during the financial year 2009-2010.

25


Dear All (or Members)

This is to certify that all Board Members and Senior Management Personnel, to whom the Code of Conduct of the Company applies, arecomplying / abiding by the same and no instance of non-compliance with the same has been reported till date.

Bangalore Sangeeta C. Pardhanani30 June 2010 Managing Director

B. CEO CERTIFICATION

As per the requirement of Corporate Governance Code, the Managing Director and Chief Financial Officer have furnished a necessarycertificate to the Board of Directors with respect to financial statements and Cash flow statement for the year ended 31 MARCH 2010.

DISCLOSURES

Under related party transactions :

The Company has contributed a sum of Rs.7,00,000/- to C. Pardhanani’s Education Trust wherein Mr. C.B. Pardhanani, Chairman is a Trustee.

MEANS OF COMMUNICATION

The Company is publishing unaudited quarterly results in the newspaper namely, Financial Express.

GENERAL SHAREHOLDER INFORMATION

a. Date, Time and Venue of Annual General Meeting

Date Time Venue

Thuesday, 31 August 2009 3 p.m. Hotel Le Meridien, No.28, Sankey Road, Bangalore – 560 052.

b. Financial Calendar

- Annual General Meeting 31st August 2010

- Quarterly Results - 30.06.2010 Last week of July, 2010

- Quarterly Results - 30.09.2010 Last week of October, 2010

- Quarterly Results - 31.12.2010 Last week of January, 2011

- Quarterly Results - 31.03.2010 Last week of April, 2011

c. Book Closure dates - AGM 21st August 2010 to 31st August 2010 (both days inclusive)

d. Dividend payment date The Dividend will be paid on or before 30th September 2010

e. Listing of Equity Shares on the Your Company’s shares are listed in Bombay Stock Exchange and BangaloreStock Exchanges at Stock Exchange and the Annual listing fees for these two stock exchanges have

already been paid.

f. Stock Code : Trading Symbol & Code :

Bombay Stock Exchange MAC CHARLES 507836

Bangalore Stock Exchange MAC

g. Demat ISIN numbers in NSDL & CDSL INE435D01014

h. Registrars & Transfer AgentsShares Transfer and communication BgSE Financials Limitedregarding share certificates, demat, RTA Division, No.51, 1st Cross, J.C. Road,dividends, change of address etc., Bangalore – 560 027.

i. Share Transfer System In compliance of SEBI requirement, share transfers are entertained, both under dematform and physical form.

Share Transfers in respect of physical shares are normally effected within 10-15days from the date of receipt.

Demat requests are put through as per NSDL / CDSL guidelines.

A. CODE OF CONDUCT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, all listed Companies are required to adopt a Code of Conduct forBoard of Directors and members of the Senior Management. Accordingly, the Board of Directors of the Company has laid down a Code ofConduct applicable to all the Board Members and Senior Management Personnel. All those governed by the said Code of Conduct have madethe following declaration with respect to adoption of the Code of Conduct.

26


I. Distribution of Shareholding as on 31 March 2010

No. of Equity Shares held No.of % of No. of % ofShareholders Shareholders Shares Shareholding

Up to – 500 12758 98.43 10,48,350 16.00

501 – 1000 122 0.94 95,150 1.45

1001 – 2000 49 0.38 68,600 1.05

2001 – 3000 11 0.08 28,250 0.43

3001 – 4000 3 0.02 10,850 0.17

4001 – 5000 2 0.02 9,100 0.14

5001 – 10000 7 0.05 42,050 0.64

10001 – 50000 4 0.03 91,400 1.40

50001 and above 6 0.05 51,56,776 78.72

Total 13129 100 65,50,526 100

m. Categories of Shareholders as on 31 March 2010

Category No.of Share Holders Total Shares % of Total Equity

Overseas Corporate Bodies 1 80,000 1.22FI’s & Banks 3 1,600 0.02Bodies Corporate 60 1,34,452 2.05Non-Resident Indian public 374 64,650 0.99Directors 3 48,08,676 73.41Resident Indian Public 12521 14,61,148 22.31

Total 12962 65,50,526 100.00

The Company has not issued any GDRs/ ADRs, Warrants & Convertible Instruments.

n. Dematerialisation of Shares and Liquidity as on 31 March 2010

No. of Shareholders No. of Shares % of shares

No. of Sharesholders in Physical Mode 11303 1483200 22.65

No. of Sharesholders in Electronic Mode 1659 5067326 77.35

Total 12962 6550526 100

MONTH MONTHLY MONTHLYHIGH (Rs.) LOW (Rs.)

APRIL 2009 163.95 132.00MAY 189.00 153.05JUNE 233.60 186.30JULY 220.00 170.00AUGUST 194.95 159.05SEPTEMBER 206.95 180.50OCTOBER 205.65 176.25NOVEMBER 192.00 167.35DECEMBER 204.90 180.00JANUARY 2010 231.90 200.40FEBRUARY 219.90 188.05MARCH 209.60 185.30

No shares are traded on Bangalore Stock Exchange Limitedfrom 01.04.2009 to 31.03.2010

MAC CHARLES SENSEX

18000

15000

12000

9000

6000

3000

0Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

300

250

200

150

100

50

0

k. Stock performance Vs BSE Sensex :j. Stock Market Data on Bombay Stock Exchange :

27


I REGISTRATION DETAILS :Registration Number U55101KA1979PLC003620 State Code 08Balance Sheet Date 31-03-2010

II CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)Public Issue Nil Rights Issue NilBonus Issue Nil Preferential Issue Nil

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)Total Liabilities 2,05,64,86 Total Assets 2,05,64,86Sources of FundsPaidup Capital 6,55,32 Reserves & Surplus 1,91,10,08Secured Loans 1,68,36 Deferred Tax Liability 6,31,10Applications of FundsNet Fixed Assets 71,12,45 Investments 90,88,11Net Current Assets 43,56,17

IV PERFORMANCE OF THE COMPANY (Amount in Rs. Thousands)Turnover (including Other Income) 69,28,34 Total Expenditure 37,07,51Profit Before Tax 32,20,83 Profit After Tax 25,24,79Earnings per Share (in Rs.) (Basic and Diluted) 38.54 Dividend (%) 110

V. GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICE OF COMPANYThe Company is in the business of Hoteliering which is not covered under ITC classifications.

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

Information as Required Under Part IV of Schedule VI to The Companies Act, 1956

On behalf of the Board

M.S.Reddy C.B.PardhananiVice President Finance and ChairmanCompany Secretary

Bangalore J.Matthan Sangeeta C.Pardhanani30 June 2010 Director Managing Director

INDUSTRY STRUCTURE & DEVELOPMENTS

During the year under report, the global economic turmoil especially inthe western countries has caused unprecedented recession and job lossesall around the world. The Indian economy too suffered heavily withlower export of goods and services. The Indian IT and BPO business islanguishing. Hospitality industry too is badly affected pushing the roomoccupancy and average room rate significantly lower levels.

REVIEW OF OPERATIONS

During the year under report, the economy witnessed a global economicslowdown mainly resulted on account of unprecedented turmoil in thebanking and financial sector in developed countries. The Indianeconomy is also affected resulting in lower Hotel room occupancy andaverage room rate. Hence, sales turn over has decreased from Rs.6307lakhs to Rs.4152 lakhs. During the current financial year 2010-11, thehotel business is improving. Hence, working results will be better.

SEGMENT WISE PERFORMANCE

The Company is currently operating only one integrated business atone geographical location viz., Le Meridien, Bangalore.

FUTURE OUTLOOK, RISK AND CONCERNS

The future of the hotel industry is entirely dependant on the state ofthe country’s economy. The outlook for the Financial Year 2010-11 isimproving. The demand for hotel accommodation is improving. TheCompany’s performance is expected to show an improvement.

OPPORTUNITIES AND THREATS

The Company is presently affected by Indian economic recession ingeneral and Bangalore’s slow IT growth in particular. Other factorsthat may retard the hotel industry are :

a) global recession

MANAGEMENT DISCUSSION & ANALYSIS REPORTb) the growing competition due to impending entry of many new hotelsc) high taxationd) inadequate infrastructure facilitiese) global terrorismf) general slump in five star hotel businessg) other global factors

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal information systems ensure smooth information flow to facilitateproper control. Adherence to the systems is then validated through theprocess of internal audit. The Company has adequate system of internalaudit control to ensure that all the assets are safeguarded and protected.Regular internal audits are conducted by the professional CharteredAccountant firm and reports submitted by these Internal Auditors areperiodically reviewed by the Audit Committee of the Board. The findingsand compliance/s are reported to the apex level management on aperiodic basis. The Company has constituted an in-house Audit Committeefor timely implementation of internal audit recommendations. TheCompany has clear systematic process and well-defined roles andresponsibilities for people at different hierarchical levels. This ensuresappropriate information flow to facilitate monitoring.

CAUTIONARY STATEMENT

The views and futuristic statements contained in this report are theperception of management and subject to certain risks and uncertaintythat could cause actual results to differ materially from those reflectedin such statements. Readers should carefully review the otherinformation in this Annual Report and in the Company’s periodicreports. The Company undertakes no obligation to publicly update orrevise any of these futuristic statements, whether as a result of newinformation, future events, or otherwise.

28


STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956,RELATING TO SUBSIDIARY COMPANY

Name of the Subsidiary Company Nedstar HotelsPrivate Limited

Financial Year of the Subsidiary Company ended on 31 MARCH 2010

Number of Shares in the Subsidiary Company held byMessrs. MAC CHARLES (INDIA) LIMITED, Bangalore, as the above dated 29988

The net aggregate of Profit, less losses, of the Subsidiary Company so far as it Rs. in Lakhsconcerns the members of Messrs. MAC CHARLES (INDIA) LIMITED

(i) Dealt with in the accounts of Messrs. MAC CHARLES (INDIA) LIMITED, amount to :

(a) for the subsidiary’s financial year ended 31st March 2010 14.97

(b) for previous financial years of the subsidiary since it became subsidiaryof Messrs. MAC CHARLES (INDIA) LIMITED Nil

(ii) Not deal with in the accounts of Messrs. MAC CHARLES(INDIA) LIMITED, amount to :

(a) for the subsidiary’s financial year ended 31st March 2010 Nil

(b) for previous financial years of the subsidiary since it became subsidiaryof Messrs. MAC CHARLES (INDIA) LIMITED Nil

Changes in the interest of Messrs. MAC CHARLES (INDIA) LIMITED,between the end of the subsidiary’s financial year ended 31 March 2010 : N.A.

Number of shares acquired

Material changes between the end of the subsidiary’s financial year ended 31 March 2010

1. Fixed Assets (net addition)

2. Investments N.A.

3. Moneys lent by the subsidiary

4. Moneys borrowed by the subsidiary company other than for meeeting current liabilities

29


NOTICE

Notice is hereby given that the Annual General Meeting of themembers of Messrs. NEDSTAR HOTELS PRIVATE LIMITEDwill be held at Registered Office at XI-447, VIP Road, Mekkad P ONedumbassery, Ernakulam, Kochi – 683589 on Monday the30th August 2010 at 11.00 A.M. to transact the following business:

ORDINARY BUSINESS:-

1. To consider and adopt the Directors’ Report, the Audited BalanceSheet as at 31st March 2010 and the Profit and Loss Account forthe year ended on that date together with the ComplianceCertificate and the Auditors’ Report thereon.

2. To appoint Auditors M/s. K. J. THOMAS & ASSOCIATES,Chartered Accountants and to fix their remuneration.

SPECIAL BUSINESS:-

3. To consider and if thought fit to pass the following resolution asan ordinary resolution:

“RESOLVED THAT Mrs. KAVITA C. PARDHANANI, whowas appointed as an Additional Director of the company witheffect from 21st October 2009 and who holds office under Section260 of the Companies Act, 1956, up to the date of this annualgeneral meeting, be and is hereby appointed as a director of thecompany”.

4. To consider and if thought fit to pass the following resolution asan ordinary resolution:

“RESOLVED THAT Mr. P. B. APPIAH, who was appointed asan Additional Director of the company with effect from 26thFebruary 2010 and who holds office under Section 260 of theCompanies Act, 1956, up to the date of this annual generalmeeting, be and is hereby appointed as a director of thecompany”.

By order of the Board of Directors

Kochi Sangeeta C. Pardhanani26 May 2010 Director

NOTE:

1. A member entitled to attend and vote is entitled to appoint aproxy to attend and vote instead of himself and the proxy mustbe a member or relative of member of the Company.

2. The relative explanatory statement required under section 173(2)of the Companies Act, 1956, in respect of ordinary resolutionsset out above is annexed hereto

EXPLANATORY STATEMENT

Required under Section 173(2) of the Companies Act, 1956

Item No. 3 & 4 :-

Mrs. KAVITA C. PARDHANANI and Mr. P. B. APPIAH, wereappointed on 21st October 2009 and 26th February 2010respectively, as an additional director. Pursuant to the provisions ofthe Section 260 of the Companies Act, 1956, Mrs. KAVITA C.PARDHANANI and Mr. P. B. APPIAH, will hold the office of aDirector up to the date of the forthcoming Annual general Meetingnow required to be appointed as Directors of the company.

NEDSTAR HOTELS PRIVATE LIMITED

DIRECTORS’ REPORT

TOTHE SHAREHOLDERS:

Your Directors have pleasure in presenting the Annual Report forthe year ending 31st March 2010.

FINANCIAL HIGHLIGHTS:

Financial Results of the Company for the year are as follows;

(Amount in Rupees)

Particulars 2010 2009

Income 84,83,306 63,24,186

Other Income 6,130 9,819

Total Income 84,89,436 63,34,005

Total Expenditure 1,34,11,669 1,39,51,638

Net profit (loss) (49,22,233) (76,17,633)

DIVIDEND:

In view of accumulated loss, your Directors do not recommend anydividend for the year under review.

DIRECTORS:

During the year under report, Mr. C. B. Pardhanani andMiss. Sangeeta C. Pardhani, were appointed as additional Directorswho were subsequently appointed as regular Directors at the AnnualGeneral Meeting held on 30th September 2009. Subsequently,Mrs. Kavita C. Pardhanani, and Mr. P. B. Appiah, were appointedas an additional Directors of the Company with effect from 21stOctober 2009 and 26th February 2010 respectively who hold officeunder Section 260 of the Companies Act, 1956, up to the date ofensuing annual general meeting.

Mr. F. M. Shamier Marickar, Directors, has resigned on 14.10.2009which was accepted by the Board on 21.10.2009.

AUDITORS:

M/s. K. J. THOMAS & ASSOCIATES, Chartered Accountants,Bangalore retire at the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment.

Auditors’ remarks, if any have been suitably explained in Notes onaccounts.

DIRECTORS’ RESPONSIBILITY STATEMENT U/S 217 (2AA) :

As required under Section 217(2AA) of the Companies Act, 1956your Directors state that:

• While preparing Annual Accounts for the year ending 31st March2010, the applicable Accounting Standards have been followedalong with proper explanations relating to material departures;

• Company had selected such accounting policies and applied themconsistently and made judgments that are reasonable and prudentwhich gives true and fair view of affairs of the Company;

• Company had taken proper and sufficient care for the maintenanceof adequate Accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

• Company had prepared accounts for the year ending 31st March2010 on a going concern basis.

30


PARTICULARS REQUIRED U/S.217 (1)(e) OF THECOMPANIES ACT, 1956:

i. CONSERVATION OF ENERGY:

During the year under review, your company has not consumedenergy of any significant level and proper measures were takenfor energy conservation.

ii. TECHNOLOGY ABSORPTION:

No comment is made on technology absorption considering natureof activities under taken by your company during the year underview and efforts are being made to improve the quality andreduce the manufacturing cost of the products.

iii. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings in Foreign Exchange - Rs. Nil

Expenditure in Foreign Currency - Rs. Nil

STATUTORY COMPLIANCE CERTIFICATE:

As required under Section 383A of the Companies Act, 1956,Statutory Compliance Certificate issued by a Company Secretary inWhole Time Practice is annexed herewith.

INFORMATION OF EMPLOYEES U/S. 217 (2A) :

None of the employees were drawing remuneration more than thelimit prescribed under Section 217(2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for thesupport and assistance received from all shareholders, Banks, Centraland State Government departments and the employees of theCompany.


Kochi P. B. Appiah Sangeeta C. Pardhanani26 May 2010 Director Director

AUDITOR’S REPORT

ToThe Members ofNEDSTAR HOTELS PRIVATE LIMITED.

1. We have audited the attached Balance Sheet of M/s NEDSTARHOTELS PRIVATE LIMITED as at 31st March 2010 and therelated Profit and Loss Account for the year ended on that date.These financial statements are the responsibility of thecompany’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of materialmisstatements. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accountingprinciples used and significant estimates made by themanagement, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonablebasis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issuedby the Central Government of India in terms of section 227 (4A) ofthe Companies Act, 1956, we enclose in the annexure a statementon the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph2 above, we report that:

a) We have obtained all the information and explanations, whichto the best of our knowledge and belief where necessary forthe purposes of our Audit.

b) In our opinion, proper books of accounts as required by lawhave been kept by the Company so far as appears from ourexamination of those books

c) The Balance sheet and Profit & Loss Account dealt with bythis report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Accountdealt with by this report comply with the accountingstandards referred to in section 211(3C) of the CompaniesAct,1956.

e) In our opinion and based on information and explanationsgiven to us, we report that none of the Directors is disqualifiedas on 31st March 2010 from being appointed as a director interms of clause (g) of sub section (1) of section 274 of thecompanies Act,1956 ;

f) In our opinion and to the best of our information and accordingto the explanations given to us, the said accounts read togetherwith significant Accounting policies and other notes, givethe information required by the Companies Act, 1956, in themanner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India.

• In the case of the Balance Sheet, of the state of affairs ofthe Company as at 31st March, 2010; and

• In case of Profit and Loss Account, of the loss for theyear ended on that date.

For K.J.Thomas & AssociatesChartered Accountants

Kochi K.J.Thomas, F.C.A

26 May 2010 (M.No.19454)

31


1. In respect of fixed assets;

(a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixedassets.

(b) As explained to us, the fixed assets have been physicallyverified by the management during the year on a periodicalbasis, which in our opinion is reasonable, having regard tothe size of the company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.

(c) During the year the company has not disposed of anysubstantial major part of fixed assets.

2. None of the fixed assets have been revalued during the year.

3. In respect of inventories.

(a) As explained to us, inventories were physically verifiedduring the year by the management at reasonable intervals.

(b) In our opinion, and according to the information andexplanations given to us, the procedures of physicalverification of inventories followed by the management werereasonable and adequate in relation to the size of the companyand nature of its business.

(c) In our opinion and according to the information andexplanations given to us, the company has maintained properrecords of its inventories. The discrepancies noticed onphysical verifications of inventories as compared to bookrecords were not material and have been properly dealt within the books of account.

4. (a) According to the information and explanations given to us,the company has not granted any loans, secured or unsecured,to companies, firms or other parties listed in the Registermaintained under section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us,during the year, the company has taken loan, secured orunsecured, from companies, firms or other parties listed inthe Register maintained under section 301 of the CompaniesAct, 1956.

5. In our opinion and according to the information and explanationsgiven to us, there are adequate internal control procedurescommensurate with the size of the company and nature of itsbusiness for the purchase of inventory, fixed assets and also forthe sale of goods and services. During the course of our audit, wehave not observed any major weakness in the internal controls.

6. In respect of particulars or contracts or arrangements referred toin section 301 of the Companies Act, 1956:

As per the information and explanations given to us, theparticulars of contracts or arrangements referred to in section301 of the Companies Act, 1956 have not been entered in theregister required to be maintained under that section.

7. The company has not accepted any deposit from the public.

8. In our opinion, the Company has an internal audit systemcommensurate with the size and nature if its business.

9. We are informed that maintenance of cost records has not beenprescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for theproducts of the Company.

10. In respect of statutory dues.

According to the records of the company, undisputed statutorydues including Provident Fund, Investor Education and ProtectionFund, Employees’ State Insurance, Income Tax, Sales Tax, Wealthtax, service tax, Customs Duty, excise Duty, cess and otherstatutory dues have been regularly deposited with the appropriateauthorities. According to the information and explanations givento us, no undisputed amounts payable in respect of the aforesaiddues were outstanding as at 31st Match 2009 for a period ofmore than six months from the date they become payable.

11. The company has incurred a loss at the end of the year, whichincludes cash losses during the current financial year.

12. Based on our audit procedures and to the best of our knowledgeand belief and according to the information and explanationsgiven to us, we are of the opinion that the company has notdefaulted in the repayment of dues to banks.

13. According to the information and explanations given to us, thecompany has not granted any loans and advances on the basis ofsecurity by way of pledge of shares, debentures and othersecurities.

14. The provisions of any special statue applicable to Chit Fund,Nidhi or Mutual Benefit Fund/Societies are not applicable to thecompany.

15. As the company is not dealing or trading in shares, securities,debentures and other investments, paragraph (xiv) of theCompanies (Auditors’ Report) Order, 2003 is not applicable tothe Company for the year.

16. In our opinion, the Company has not given guarantees for loanstaken by others from banks or financial institutions.

17. To the best of our knowledge and belief and according to theinformation and explanations given to us, term loans availed bythe company from KFC during the year were, prima facie,applied by the company.

18. The Company has not made any preferential allotment of sharesto parties and companies covered under register maintained undersection 301 of the Companies Act, 1956.

19. The Company has not issued debentures during the year.Therefore, paragraph 4(xix) of the companies (Auditors’ Report)Order, 2003 is not applicable to the Company.

20. To the best of our knowledge and belief and according to theinformation and explanations given to us, no fraud on or by thecompany was noticed or reported during the year.



26 May 2010 (M.No.19454)


ANNEXURE TO AUDITORS’ REPORT DATED 26 MAY 2010

32


Particulars SCH 2010 2009Rupees Rupees

I SOURCES OF FUNDS:

1 Shareholders' Fund

a. Authorised capital(30,000 Equity shares of Rs. 1,000/- each) 3,00,00,000.00 3,00,00,000.00

b. Issued Subscribed & Paid up capital A 2,99,88,000.00 2,99,88,000.00(29988 Equity Shares of Rs. 1,000/- each)

2 Reserves & Surplus 22,04,500.00 22,04,500.00

3 Loan Funds:

a. Secured Loan B 5,91,898.78 2,18,34,176.88

b. Unsecured Loan C 3,89,14,116.75 1,66,63,410.96

c. Deposit- Bharati Airtel Ltd. 50,000.00 50,000.00

7,17,48,515.53 7,07,40,087.84

II APPLICATION OF FUNDS:

4 Fixed Assets

a) Gross Block D 5,32,36,726.46 5,29,45,099.46

b) Less : Depreciation 1,48,37,117.94 1,21,01,371.38

c) Net Block 3,83,99,608.52 4,08,43,728.08

5 Current Assets, Loans & Advances

a) Cash & Bank balance E 6,57,694.71 3,50,387.02

b) Debtors for Loans & Advances F 10,000.00 28,82,504.71

c) Deposits G 5,47,675.00 4,84,726.00

d) Inventories H 36,394.73 45,448.36

e) Sundry Debtors I 24,75,883.92 37,27,648.36 21,39,595.47

4,21,27,256.88 4,67,46,389.64

Less : Current Liabilities & Provisions

a) Sundry Creditors for Supplies J 2,60,050.93 4,94,965.13

b) Other Creditors K 8,27,445.20 8,19,290.37

c) Creditors for expenses L 4,19,906.39 15,07,402.52 8,98,474.15

4,06,19,854.36 4,45,33,659.99

Add : Miscellaneous expenditure M 12,70,772.60 12,70,772.60

Profit & Loss Account (Net Loss) N 2,98,57,888.57 3,11,28,661.17 2,49,35,655.25

7,17,48,515.53 7,07,40,087.84

Notes forming part of the accounts T

BALANCE SHEET AS AT 31 MARCH 2010

As per our report of even date On behalf of the Board

For K.J. Thomas & AssociatesChartered Accountants

K.J. Thomas F.C.A P.B. Appiah Sangeeta C. Pardhanani(M.NO.19454) Director Director

Kochi Kochi26 May 2010 26 May 2010

33


Particulars SCH 2010 2009Rupees Rupees

I INCOME:

As per Schedule O 84,98,489.14 63,24,185.66

Decrease in Stock (9,053.63) 9,819.36

84,89,435.51 63,34,005.02

II DIRECT EXPENSES:

As per Schedule P 20,29,421.46 19,35,122.50

III INDIRECT EXPENSES:

Staff Salary & Other benefits Q 7,84,496.00 6,43,302.00

Administrative expenses R 52,05,907.96 65,46,599.23

Interest & Bank charges S 26,56,096.85 20,28,312.27

Depreciation D 27,35,746.56 27,98,301.89

1,34,11,668.83 1,39,51,637.89

Net Loss 49,22,233.32 76,17,632.87

84,89,435.51 63,34,005.02

Notes forming part of the accounts T

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010

As per our report of even date On behalf of the Board

For K.J. Thomas & AssociatesChartered Accountants

K.J. Thomas F.C.A P.B. Appiah Sangeeta C. Pardhanani(M.NO.19454) Director Director

Kochi Kochi26 May 2010 26 May 2010


34



Particulars 2010 2009Rupees Rupees

SCH-A: Issued, Subscribed and Paid up capital

Mr. George Abraham – 5,00,000.00

Mrs. Saramma George – 5,00,000.00

Mr. F. M. Shamier Marickar – 5,10,000.00

Mrs. Premin Marickar – 5,10,000.00

Dr. Y. M. Fasil Marickar – 5,10,000.00

Dr. V.M. Khurshid – 5,10,000.00

Marickar Plantations (P) Limited. – 2,69,48,000.00

Mac Charles (India) Limited - (the Holding Company) 2,99,88,000.00 –(29988 Equity shares of face value of Rs. 1,000/- each)

2,99,88,000.00 2,99,88,000.00

SCH-B: Secured Loan

Sundaram Finance, Car Loan 9,714.38 68,000.06

TML, Car Loan 1,55,628.40 2,29,557.48

Federal Bank, Nedumbasery. – 552.00

Term Loan UBI – 25,42,499.34

KFC Term Loan 4,26,556.00 1,89,93,568.00

5,91,898.78 2,18,34,176.88

SCH-C: Unsecured Loan

Loan from Holding Company 2,30,00,000.00 –

Head Office A/c 1,59,14,116.75 –

Marickar Plantations(p) Ltd. – 1,66,63,410.96

3,89,14,116.75 1,66,63,410.96

SCH-D: Fixed Assets

GROSS BLOCK DEPRECIATION NET BLOCK

Description Rate of Value as on Addtions As at Up to for the year As at As at As atDepreciation 31-03-2009 31-03-2010 31-03-2009 31-03-2010 31-03-2010 31-03-2009

Land – 33,98,521.00 – 33,98,521.00 – – – 33,98,521.00 33,98,521.00

Bui ld ings 5% 3,74,61,732.89 – 3,74,61,732.89 61,77,471.90 15,64,213.05 77,41,684.95 2,97,20,047.94 3,12,84,260.99

Plant & Machinery 13.91% 71,24,044.05 84,085.00 72,08,129.05 31,35,521.66 5,59,605.61 36,95,127.28 35,13,001.77 39,88,522.39

Computers 40% 3,38,338.20 – 3,38,338.20 2,24,443.96 45,557.70 2,70,001.66 68,336.54 1,13,894.24

Furniture & Fittings 25.88% 38,86,264.32 2,07,542.00 40,93,806.32 23,56,338.13 4,29,514.82 27,85,852.94 13,07,953.38 15,29,926.19

Vehicles 25.89% 7,36,199.00 7,36,199.00 2,07,595.73 1,36,855.39 3,44,451.12 3,91,747.88 5,28,603.27

5,29,45,099.46 2,91,627.00 5,32,36,726.46 1,21,01,371.38 27,35,746.56 1,48,37,117.94 3,83,99,608.52 4,08,43,728.08

Note:- Depreciation on Plant & Machinary Rs.49,562/- is not considered (date of purchase 11.03.2010)

35


SCH-E: Cash & Bank Balances

Cash in hand 33,270.79 23,551.67The Vysya Bank Ltd, Cherukole – 2,84,436.06Federal Bank, Nedumbassery 389.00 –Federal Bank,Broadway Branch – 5,000.00IDBI, Ernakulam 1,28,759.48 35,561.39South Indian Bank 63,652.00 –Union Bank Athani 4,31,238.90 –ICICI Bank 104.50 –The ING Vysya Bank, Thiruvalla 162.78 –Union Bank Of India 117.26 1,837.90

6,57,694.71 3,50,387.02

SCH-F: Debtors for Loans & Advances

House Rent Advance 10,000.00 10,000.00Mr. George Abraham – 22,26,359.83Mr. Shamier Marickar – 1,16,144.88Project Moothedam – 5,30,000.00

10,000.00 28,82,504.71

SCH-G: Deposits

Electricity Board Deposit 3,70,000.00 3,33,390.00Sales Tax Deposit 25,000.00 25,000.00Telephone Deposit 8,000.00 8,000.00TDS 1,44,675.00 1,18,336.00

5,47,675.00 4,84,726.00

SCH-H: Inventories 36,394.73 45,448.36

SCH-I: Sundry Debtors

Air India 49,052.20 49,052.20Cabana Hotels- Franchisee 15,75,072.00 14,75,072.00Desiya Online Travels 35,651.50 2,022.00Esys Information 54,000.00 –Best Western International 28,552.00 –GMMCO 69,437.00 –Indian Air Lines 46,529.34 15,734.34J.M.Baxi & Co 32,164.75 –Motor Sports Association of India 30,631.00 30,631.00Room Credit Service 26,007.34 25,379.34Silk Air 43,902.50 43,902.50TATA AIG Life Insurance 37,197.00 –TCI , Ravipuram 64,412.00 64,412.00Travel Guru 46,644.00 21,501.00Others 3,36,631.29 4,11,889.09

24,75,883.92 21,39,595.47

SCH-J: Sundry Creditors for Suppliers

A.A Jaison – 32,036.00Ajay parivahan – 40,000.00Angel Dry Cleaners 16,188.00 35,623.00Creative Concepts 17,000.00 –Economic Times 50,000.00 –Kerala Publicity Bureau 40,449.00 1,40,449.00Kallarackal Chicken Centre 14,078.65 14,078.65Liberty Dress Makers 10,130.00 5,190.00Super Gas Agencies 26,094.62 34,000.38V.P Joshi 20,807.00 62,485.00Others 65,303.66 1,31,103.10

2,60,050.93 4,94,965.13




36



SCH-K: Other Creditors

Aneesh Tile polish 55,064.88 89,064.88Blue Star AC 88,826.00 –Intermarket India 50,692.00 –LIZ Travels 30,000.00 –M. D General Stores 42,644.00 42,288.94K.H.Abdullah 25,000.00 –Narayanan 50,000.00 –OM Marketing 53,000.00 –Rakshak Securities 71,256.00 86,048.00Ranco Impex 46,959.00 –Reliance Fire Protection Engin 49,552.00 –Thoshali Tours & Travels 68,697.00 68,697.00

Others 1,95,754.32 5,33,191.55

8,27,445.20 8,19,290.37

SCH-L: Creditors For Expenses

Audit fee payable 20,000.00 20,000.00

Electricity charges Payable 2,14,561.00 6,01,631.00

ESI Payable 2,802.00 6,670.00

Salary Payable 43,000.00 56,700.00

KVAT Payable 29,787.00 19,111.99

Luxury Tax Payable 34,215.39 1,03,732.16

Professional fees Payable 60,000.00 60,000.00

TDS Payable 4,528.00 4,528.00

Provident Fund Payable 11,013.00 26,101.00

4,19,906.39 8,98,474.15

SCH-M: Miscellanious Expenditure

Preliminary Expenses: 12,70,772.60 12,70,772.60

12,70,772.60 12,70,772.60

SCH-N: Profit & Loss Accounts

Opening Balance as per last Balance sheet 2,49,35,655.25 1,73,18,022.38

Net Loss for the year 49,22,233.32 76,17,632.87

2,98,57,888.57 2,49,35,655.25


SCH-O: Income

Room Rent 52,52,663.31 37,99,900.00Room Service 5,69,885.00 4,31,747.00Rent & Rates 4,700.00 18,597.00Rent - Airtel 1,80,500.00 2,30,000.00Advance from Guest 3,500.00 –Round off 1,980.52 598.71Internet 10,035.00 3,175.00Laundry Charges received 40,611.00 16,470.00Telephone Charges Received 6,112.00 46,740.93Extra Bed 1,61,142.00 33,777.00Interest On Deposit 15,183.00 –Miscellaneous bills 27,951.14 –Discount Received 4,941.06 24,094.45Food Plan Bills 2,18,887.00 7,054.00Sales Entizer 18,77,004.11 14,56,288.56

Taxi rent received 1,23,394.00 2,55,743.01

84,98,489.14 63,24,185.66


37


SCH-P: Direct Expenses

Gas & Fuel 2,83,973.21 4,01,277.32

Provision purchases 5,40,048.76 2,78,758.60

Bakery 1,46,160.31 88,278.38

Fruits & Vegetables 2,75,361.91 2,32,076.91

House Keeping Materials 2,61,933.27 95,928.79

Milk 1,38,404.05 1,31,680.15

Fish & Meat 1,70,482.00 1,79,253.79

Poultry 2,06,980.79 2,02,461.57

Miscellaneous Purchase 6,077.16 3,25,406.99

20,29,421.46 19,35,122.50

SCH-Q: Staff Salary & Other Benifits

Salary & Allowances 7,84,496.00 6,43,302.00

7,84,496.00 6,43,302.00

SCH-R: Administrative & Other Expenses

Advertisement charges 3,74,469.00 3,79,863.00

Annual Maintenance 3,03,423.00 3,44,813.30

Generator Maintenance 2,10,317.00 3,75,861.99

Electricity & Water Charges 19,86,167.00 23,16,414.00

Laundry Charges 1,78,653.00 1,25,741.00

General Insurance 1,01,891.00 1,05,712.00

Rent & Rates & Taxes 1,04,037.00 81,686.00

FBT (2008-09) 35,060.00 –

Postage & Telephone 71,269.50 91,803.00

Printing & Stationary 1,64,782.29 2,31,041.00

Provident Fund Contribution 62,234.00 67,240.00

Repairs and maintenance 3,90,058.00 6,00,633.94

Security Services 1,58,970.00 2,46,187.00

Transportation Charges 20,272.55 13,107.50

Travelling & Conveyance expenses 2,26,372.00 1,32,874.00

Vehicle Maintenance 1,14,561.00 49,225.00

Vehicle running expenses 1,53,020.00 2,12,623.84

Professional fees 51,222.00 68,736.00

E.S.I. Contribution 22,588.00 23,539.00

Punchayath Tax 14,928.00 –

Staff Welfare expenses 94,353.00 90,391.70

Business Promotion 91,741.50 52,970.51

Cable T.V. & Internet charges 94,139.00 71,259.00

Other Maintenance Expenses 1,81,380.12 8,64,876.45

52,05,907.96 65,46,599.23

SCH-S: Interest & Bank Charges

KFC Interest - Term Loan 24,20,315.00 16,42,852.00

Bank charges & Interest 2,03,157.85 3,85,148.27

Others 32,624.00 312.00

26,56,096.85 20,28,312.27




38


NOTES ON ACCOUNTS

SCHEDULE – T

NOTES ATTACHED TO AND FORMING PART OF THEBALANCE SHEET AS AT 31-03-2010 AND PROFIT AND LOSSACCOUNT FOR THE YEAR ENDED 31-03-2010.

1. Significant Accounting Policies.

a) Accounting Concepts: - The Company follows the mercantilesystem of accounting and recognizes income on accrual basis.The accounts are prepared on Historical cost basis and asgoing concern. Accounting Policies not referred to otherwiseare consistent with generally accepted accounting policies.

b) Fixed Assets: - Fixed Assets are valued at their original costcomprising of the purchase price and attributable cost forbringing the asset to working condition for its intended use.

c) Inventories: - Inventories are valued at cost or realizablevalue.

d) Depreciation: - Depreciation is provided on Written DownValue method at the rates specified in schedule XIV of theCompanies Act, 1956 on all assets except land value.

2. Secured Loans:

i. Medium Term Loan from Kerala Financial Corporation issecured by way of mortgage of Company’s all movable andimmovable properties and is further guaranteed byMr. George Abraham and Mr. Shamier Marickar, Ex-Directorsin their personal capacities.

ii. Vehicle loans obtained from M/s. Sundaram Finance Ltd;and are secured by hypothecation of vehicles.

3. Contingent Liabilities:

No Provision for contingent liabilities are required for the yearunder review.

4. Previous year figures have been re-grouped wherever foundnecessary.

5. Confirmation of balances has not been obtained directly fromDebtors and Creditors.

6. The company has not appointed a whole time Company Secretary.

7. Employees employed throughout the financial yearwho were in receipt of remuneration aggregatingRs.24,00,000/- or more per year or employed for NILpart of the year who were in receipt of Rs.200,000/-or more per month.

8. Managerial Remuneration NIL

9. (a) Debts considered good in respect of which thecompany is fully secured. NIL

(b) Debts considered good for which thecompany holds no security other Rs. 24,75,883.92than the Debtors personal security.

10. Debts due by Directors or other officers of the companyor any of them either severally or jointly with any otherperson or debts due by firms or private companies NILrespectively in which any director is a partner or adirector or a member.

11. Debts due from other companies under the samemanagement within the meaning of Sub NILSec. (1B) of Sec. 370.

12. The maximum amount due by directorsor other officers of the company at any time NILduring the year.

13. Claims against the company not acknowledgedas debts. NIL

14. Estimated amount of contracts remaining to beexecuted on Capital Account and not provided for NIL

15. Other money for which the company iscontingently liable. NIL

16. Advance for share capital is net of addition and refund during theyear

17. Other Creditors includes Rs. 8,27,445.20 being pending bills forsettlement.

18. No deferred TDS payable is provided on timing difference.No provision for income tax is also made since the company isseen not generated any profit.

As per our Report of even date



26 May 2010 (M.No.19454)


Kochi P. B. Appiah Sangeeta C. Pardhanani26 May 2010 Director Director

39


I REGISTRATION DETAILS :

Registration Number U55101KA2003PTC015864 State Code 09

Balance Sheet Date 31-03-2010

II CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)

Public Issue Nil Rights Issue Nil

Bonus Issue Nil Preferential Issue Nil

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities 7,17,49 Total Assets 7,17,49

Sources of Funds

Paidup Capital 2,99,88 Reserves & Surplus 22,04

Secured Loans 5,92 Unsecured Loans 3,89,14

Applications of Funds

Net Fixed Assets 3,84,00 Investments NIL

Net Current Assets 4,06,20

IV PERFORMANCE OF THE COMPANY (Amount in Rs. Thousands)

Turnover (including Other Income) 84,89 Total Expenditure 1,34,12

Profit/(Loss) Before Tax (49,22) Profit/(Loss) After Tax (49,22)

Earnings per Share (Basic and Diluted) in Rupees -164/- Dividend (%) NIL

V. GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICE OF COMPANY

The Company is in the business of Hoteliering which is not covered under ITC classifications.

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

Information as Required Under Part IV of Schedule VI to The Companies Act, 1956

On behalf of the Board

Kochi P.B. Appiah Sangeeta C.Pardhanani26 May 2010 Director Director


40


We have audited the attached Consolidated Balance Sheet of M/s.MAC

CHARLES (INDIA) LIMITED (‘the Company’) and its subsidiary

(the Company and its subsidiary constitute ‘the Group’) as at 31

March 2010, the Consolidated Profit and Loss Account and the

Consolidated Cash Flow Statement of the Group for the year ended

on that date, both annexed thereto. These financial statements are the

responsibility of the Company’s management. Our responsibility is

to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards

generally accepted in India. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatements. An audit

includes examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made

by the Management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for

our opinion.

We did not audit the financial statements of the subsidiary, whose

financial statements reflect total assets (net) of Rs.4,06,19,855/- and

total liabilities of Rs.3,95,56,016/- as at 31 March 2010, total revenues

of Rs.84,98,489/- and total expenditure of Rs.1,34,11,669/- for the

year ended on that date as considered in the Consolidated Financial

Statements. The financial statements of the subsidiary is audited by

another auditor whose report is furnished to us and our opinion, is so

far as it relates to the amounts included in respect of the subsidiary, is

based solely on the reports of the other auditor.

We report that the consolidated financial statements have been prepared

by the Company’s management in accordance with the requirements

of Accounting Standard (AS) 21, ‘Consolidated Financial Statements’

prescribed by the Companies (Accounting Standards) Rules, 2006.

Based on our audit and on consideration of the separate audit report on

individual financial statement of the subsidiary, and to the best of our

information and according to the explanations given to us, in our opinion,

the consolidated financial statements give a true and fair view in

conformity with the accounting principles generally accepted in India :

(a) in the case of the consolidated Balance Sheet, of the state of affairs

of the Group as at 31 March 2010 ;

(b) in the case of the consolidated Profit and Loss Account, of the

profit of the Group for the year ended on that date ; and

(c) in the case of the consolidated Cash Flow Statement, of the cash

flows of the Group for the year ended on that date.

For K. B. Nambiar & Associates

Chartered Accountants


Bangalore V. V. Gabriel

30 June 2010 Partner (M.No.213936)

AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF M/S. MAC CHARLES (INDIA) LIMITED

41


SOURCES OF FUNDS

Shareholders’ funds

Share Capital 1 6,55,32,010

Reserve and Surplus 2 190,95,11,402

Loan Funds 3

Secured Loans 1,74,28,244

Unsecured Loans 1,59,14,117

Net Deferred Tax liability 4 6,31,09,904

T O T A L 207,14,95,677

APPLICATIONS OF FUNDS

Fixed Assets 5

Gross Block 122,63,55,104

Less : Depreciation 40,47,70,418

Net Block 82,15,84,686

Capital Work-in-progress 8,13,061

Investments 6 83,43,10,732

Current Assets, Loans and Advances

Inventories 7 60,39,065

Sundry Debtors 8 1,79,97,825

Cash and Bank Balances 9 3,40,18,464

Loans and Advances 10 69,63,67,154

75,44,22,508

LESS: CURRENT LIABILITIES AND PROVISIONS 11

Current liabilities 24,62,62,341

Provisions 9,33,72,969

33,96,35,310

NET CURRENT ASSETS 41,47,87,198

TOTAL 207,14,95,677


The Schedules 1 to 11 and 19 form an integral part of Consolidated Balance Sheet





Schedule 2010No. Rupees

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2010

42


CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010

Schedule 2010No. Rupees





INCOME

Rooms, Restaurants, Banquets and Other services 12 42,03,52,219

Other Income 13 27,76,26,550

69,79,78,769

EXPENDITURE

Consumption of provisions, food supplies and beverages 14 4,26,15,989

Remuneration and benefits to employees 15 7,20,00,963

Maintenance, upkeep and services 16 5,20,65,285

Operating and administrative expenditure 17 9,63,12,203

Interest and financial expenses 18 13,74,536

Provision for Diminution in value of investments 25,95,837

Depreciation 4,17,31,537

Loss on Sale of Investments - Long Term 2,97,53,228

- Short Term 3,76,72,697

Provision for Donations 12,70,000

37,73,92,275

Profit Before Tax 32,05,86,494

Provision for Income Tax - Current Tax 5,50,00,000

Less : Excess Provision of earlier years 23,73,716 (5,26,26,284)

- Deffered Tax (1,69,77,670)

Profit after Tax for the Year 25,09,82,540

Profit brought forward from Previous Year 5,55,52,284

Profit available for appropriation 30,65,34,824

APPROPRIATION

General Reserve (15,00,00,000)

Proposed Dividend (7,20,55,786)

Corporate Dividend Tax (1,22,45,881)

Balance Carried to Balance Sheet 7,22,33,157

Earning per share basic & diluted (face value of Rs. 10/- each) 38.31


The Schedules 12 to 19 form an intergral part of Consolidated Profit and Loss account

43


2010Rupees

SCHEDULES TO CONSOLIDATED BALANCE SHEET

1. SHARE CAPITAL

AUTHORISED2,00,00,000 (2,00,00,000) Equity Shares of Rs.10/- each 20,00,00,000

ISSUED, SUBSCRIBED AND PAID UP65,50,526 (65,50,526) Equity shares of Rs.10/- each 6,55,05,260

Add : Forfeited Shares 26,750

6,55,32,010

2. RESERVES AND SURPLUS

Security Premium Account 1,75,11,237

1,75,11,237

General ReserveAt the commencement of the year 166,97,67,008

Add : Transfer from Profit & Loss Account 15,00,00,000

181,97,67,008

Profit and Loss Account

Surplus 7,22,33,157

190,95,11,402

3. LOAN FUNDS

SECURED LOANS

From BanksOver Draft 6,59,400

Cash Credit 1,61,76,945

From OthersVehicle Loans 1,65,343

Term Loan 4,26,556

1,74,28,244

UNSECURED LOANS

Other than from Banks 1,59,14,117

The Cash Credit is secured by company's immovable property at No.28, Sankey Road,Bangalore and first charge by way of hypothecation and / or pledge of the company'sentire goods, movables and other assets present and future including documents of titleto the goods and other assets, such as Book Debts, outstanding monies, receivables, bills,invoices, documents, contracts, insurance policies, guarantees, engagements, securities,investments and rights and uncalled capital and all machinery present and future andpersonal guarantee of one of the Directors of the Company.

Overdraft is secured by Fixed Deposit with the Bank.

Vehicle loans are secured by hypothecation of vehicles.

Term loan is secured by movable and immovable properties of the subsidiary Company.

4. NET DEFERRED TAX LIABILITY

Deferred Tax Liability:Accumulated Depreciation 6,45,59,369

Less : Deferred Tax Assets :Accrued Expenses deductible on payment 14,49,465

63,10,99,04

44


SCHEDULES TO CONSOLIDATED BALANCE SHEET (Contd...,)

6. INVESTMENTS

Aggregate amount of Quoted Investments 8,77,76,324

Aggregate amount of Un-quoted Investments 75,59,83,441

84,37,59,765

Less : Provision for diminution in value of Investments 94,49,033

83,43,10,7327. INVENTORIES

Provisions, Food supplies and Beverages 31,45,874

Other stores and operational supplies 28,93,191

60,39,065

8. SUNDRY DEBTORS

UNSECURED - CONSIDERED GOOD

Debts outstanding for a period exceeding six months 2,14,427

Other debts 1,77,83,398

1,79,97,825

9. CASH AND BANK BALANCES

Cash on hand 13,59,076

Balances with Scheduled Banks

On Current account 3,07,43,388

On deposit account 19,16,000

3,40,18,464

10. LOANS & ADVANCES

UNSECURED-CONSIDERED GOOD

Advances recoverable in cash / kind / for value to be recd. 65,55,79,347

Advance Income Tax 3,26,60,279

Advance FBT 27,059

Deposits 81,00,469

69,63,67,154

5. FIXED ASSETS(Amount in Rs.)

GROSS BLOCK AT COST DEPRECIATION NET BLOCK

As at Additions / As at Up to For the year Up to As atDESCRIPTION 1.4.2009 (Disposals) 31.3.2010 31.3.2009 (Withdrawal) 31.3.2010 31.3.2010

INTANGIBLE ASSETS

Goodwill – 7,19,39,681 7,19,39,681 – – – 7,19,39,681

TANGIBLE ASSETS

Land 33,65,64,276 – 33,65,64,276 – – – 33,65,64,276

Buildings 21,99,10,984 75,33,399 22,74,44,383 12,53,21,833 58,61,207 13,11,83,040 9,62,61,343

Plant & Machinery 34,60,48,674 11,77,55,983 46,38,04,657 14,72,28,534 2,67,72,149 17,40,00,683 28,98,03,974

Sanitary Fittings 1,63,85,821 – 1,63,85,821 1,04,11,750 7,98,074 1,12,09,824 51,75,997

Computers 90,66,432 9,43,600 99,49,332 82,19,053 6,72,373 88,85,657 10,63,675(60,700) (5,769)

Furniture,Fixtures& Interiors 6,74,59,909 23,99,282 6,98,59,191 5,56,83,497 40,18,190 5,97,01,687 1,01,57,504

Vehicles 2,75,73,335 43,90,380 3,04,07,763 1,77,35,935 36,09,544 1,97,89,527 1,06,18,236(15,55,952) (15,55,952)

Total 102,30,09,431 20,49,62,325 122,63,55,104 36,46,00,602 4,17,31,537 40,47,70,418 82,15,84,686(16,16,652) (15,61,721)

45


2010Rupees

SCHEDULES TO CONSOLIDATED BALANCE SHEET (Contd...,)

11. CURRENT LIABILITIES & PROVISIONS

A) Current Liabilities

Sundry Creditors:

a. Dues to Micro and Small Enterprises –

b. Others 3,70,93,126

Unclaimed Dividend 2,81,45,684

Due to Directors 56,56,611

Other Liabilites 17,53,66,920

A 24,62,62,341

B) Provisions

Proposed Dividend 7,20,55,786

Corporate Dividend Tax 1,22,45,881

Provision for Income Tax 25,39,537

Provision for Fringe Benefit Tax 1,55,980

Provision for Gratuity 9,05,829

Provision for Leave encashment 54,69,956

B 9,33,72,969

A+B 33,96,35,310

12. ROOMS, RESTAURANTS, BANQUETS AND OTHER SERVICES

Rooms 28,81,76,918

Food, Beverage & Smokes 10,91,88,876

Other Services 2,29,86,425

42,03,52,219

13. OTHER INCOME

Interest received [TDS: Rs.1,29,758/-] 90,23,462

Dividend Income [Non Trade] 70,75,089

Profit on sale of Fixed Assets 5,50,000

Profit on sale of investments - Short term 3,10,95,295

- Long term 12,81,25,214

Profit on Relinquishment of rights in immovable Properties 6,49,25,000

Income Rent [TDS: Rs.13,46,368/-] 81,85,800

Income Licence Fees [TDS: Rs.7,52,986/-] 38,82,256

Sale of Electricity Generated from Wind Turbine Genarators 2,01,15,184

Liabilities Written Back 33,11,278

Miscellaneous Income 13,37,972

27,76,26,550

2010Rupees

SCHEDULES TO CONSOLIDATED PROFIT AND LOSS ACCOUNT

46


14. CONSUMPTION OF PROVISIONS, SUPPLIES & BEVERAGESOpening Stock 31,32,554Add: Purchases 4,25,92,914

4,57,25,468Less: Closing Stock 31,09,479

4,26,15,98915. REMUNERATION & BENEFITS TO EMPLOYEES

Salaries, Wages & Bonus 6,17,09,364Contribution towards provident & other funds 45,38,701Gratuity 16,19,087Welfare Expenses 38,06,448Unavailed Leave Encashment 3,27,363

7,20,00,96316. MAINTENANCE, UPKEEP AND SERVICES

Guest Accomodation Board and Kitchen 71,27,512Linen, Uniforms & Laundry 66,51,683Repairs & MaintenanceBuilding 1,18,90,937Plant & Machinery 1,06,90,086Interiors, Furniture, Furnishings & others 89,26,944Housekeeping expenses 32,03,709Music, Entertainment & Banquet Expenses 35,74,414

5,20,65,28517. OPERATING & ADMINISTRATIVE EXPENDITURE

Power and Fuel 3,03,76,044Water Charges 36,23,206Commission to Travel & Other Agencies 38,25,833Postage, Telex & Telephones 38,40,868Printing & Stationery 22,98,017Sales Promotional Expenses 5,43,870Administrative & General Expenses 97,93,565Travel & Conveyance 30,63,315Rent 27,44,735Rates & Taxes 61,07,529Insurance 17,60,086Royalty 1,25,71,976Foreign Currency Fluctuations 2,23,655Freight & Transport 1,59,348Professional & Consultancy fees 70,24,405Miscellaneous Expenses 7,57,608Payment to AuditorsAudit Fee 2,20,214Tax Audit Fee 78,742Other Services 39,901Reimbursement of Expenses 19,286Directors Sitting Fees 1,10,000Commission to Chairman & Managing Director 71,30,000

9,63,12,20318. INTEREST & FINANCIAL EXPENSES

On Fixed Loans 7,80,621Cash Credit/overdraft 4,00,121Bank Charges 1,93,794

13,74,536

2010Rupees

SCHEDULES TO CONSOLIDATED PROFIT AND LOSS ACCOUNT (Contd...,)

47


SCHEDULE TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT (Contd...,)

19. NOTES ON ACCOUNTS

1. BASIS OF CONSOLIDATION :

The Consolidated Financial Statements relate to Mac Charles (India) Limited (‘the Company’) and its subsidiary. The Company and itssubsidiary together constitute ‘the Group’. The Consolidated Financial Statements have been prepared on the following basis :

- The financial statements of the Company and its Subsidiary have been combined on a line-by-line basis by adding together the bookvalues of like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions andunrealised profits or losses as per Accounting Standard 21 ‘Consolidated Financial Statements’, as notified by the Companies(Accounting Standards) Rules, 2006.

- The financial statements of the Subsidiary, used in the consolidation are drawn upto the same reporting date as that of the Company.

- The excess of cost to the Company of its investment in the Subsidiary over the Company’s portion of equity as at the date of makingthe investment is recognised in the financial statements as Goodwill.

- Goodwill arising out of consolidation is not amortized. However, the same is tested for impairment at each Balance Sheet date.

Disclosure under Accounting Standard 21 :

List of Subsidiary :

(a) Name : Nedstar Hotels Private Limited

(b) Country of Incorporation : India

(c) Proportion of Ownership : 100%

2. SIGNIFICANT ACCOUNTING POLICIES :

The accounts have been prepared on historical cost convention under mercantile system of accounting and generally complies withmandatory accounting standards.

a. Fixed Assets :

Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.In respect of major projects involving construction, related pre-operational expenses form part of the value of the assets capitalized.

b. Depreciation :

Depreciation is provided on straight line method on buildings at triple the rates and on other fixed assets at double the rates specifiedin Schedule XIV to the Companies Act, 1956, based on technical evaluation.

In case of subsidiary Company, depreciation is provided on written down value at the rates specified in schedule XIV of theCompanies Act, 1956. The proportion of gross block of assets of the subsidiary is 4.61% of the gross block of assets of the Group.

c. Impairment of Assets :

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on Internal /external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cashflows are discounted to the present value. A previously recognized impairment loss is further provided or reversed depending onchanges in circumstances.

d. Investments :

i. Current Investments are stated at lower of cost and fair value.

ii. Long Term Investments are stated at cost. However provision for diminution is made to recognize a decline, other thantemporary in the value of the investments.

e. Inventories :

i. To value inventories of provisions, food supplies, crockery, cutlery, glassware, beverages, stores and operational supplies atcost on Weighted Average Method. Cost includes freight and other incidental expenses.

ii. To charge to revenue the value of crockery, cutlery and glassware at the time of first issue.

f. Miscellaneous Expenditure :

To amortize the preliminary expenses and other deferred revenue expenditure over a period of 10 years.

g. Foreign Currency Transactions :

i. Transactions in foreign currencies are accounted at the average exchange rate prevailing on the date of transaction.

ii. To account for gain or loss on foreign exchange rate fluctuations relating to assets and liabilities as at the date of the BalanceSheet at the convertible rate of exchange prevailing on that date.

iii. To account for all exchange differences arising form foreign currency transactions in the Profit and Loss Account.

48


h. Revenue Recognition :

i. Room revenue is recognized on actual occupancy and is net off, of cost of complimentary airport pick-up and drop.

ii. Food and Beverage at the point of supply.

iii. Other services on rendering such services.

iv. Sale of Electricity generated from Wind Turbine Generators is recognized on the basis of electricity units metered and invoiced.

i. Employee Benefits :

i. Provident Fund :

The Company contributes to the statutory provident fund of the Regional Provident Fund Commissioner, in accordance withEmployees provident fund and Miscellaneous Provisions Act, 1952. The plan is a defined contribution plan and contributionpaid or payable is recognized as an expense in the period in which the employee renders service.

ii. Gratuity :

Gratuity is a post employment benefit and is defined benefit plan. The liability recognized in the balance sheet represents thepresent value of the defined benefit obligation at the balance sheet date less the fair value of plan assets together with adjustmentsfor unrecognized actuarial gains or losses and past service costs. Independent actuaries using the projected unit credit methodcalculate the defined benefit obligation annually.

iii. Leave Encashment :

Provision for unavailed leave to the credit of the employees at the end of the year is made on the basis of the actuarial valuation.

j. Taxation :

Current Tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxableincome and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred Tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is virtual certainty thatsufficient future taxable income will be available against which such deferred tax assets can be realized.

3. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expense for the year are as under:

Employer’s Contribution to Provident Fund Rs. 33,38,192/-

Defined Benefit Plan

The employees’ gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined basedon actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit ofemployee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment isrecognized in the same manner as gratuity.

I. Reconciliation of opening and closing balances of Defined Benefit obligation(Rs. in Lakhs)

Gratuity Leave Encashment2010 2010

Defined Benefit obligation at beginning of the year 132.85 55.49

Current Service Cost 18.70 6.03

Interest Cost 10.09 4.13

Actuarial (gain) / loss (1.41) (3.23)

Benefits paid (13.57) (7.73)

Defined Benefit obligation at year end 146.66 54.70


49



(Rs. in Lakhs)Gratuity

2010

II. Reconciliation of opening and closing balances of fairvalue of plan assets :

Fair value of plan assets at beginning of the year 130.20

Expected return on plan assets 10.24

Actuarial gain/ (loss) 1.62

Employer’s contributions 9.11

Benefits paid (13.57)

Fair value of plan assets at year end 137.60

Actual return on plan assets 11.86

III. Reconciliation of fair value of assets and present value of obligation :Gratuity Leave Encashment

2010 2010

Fair value of plan assets 137.60 –

Present value of obligation 146.66 54.70

Amount recognized in Balance Sheet 9.06 54.70

IV. The amounts recognized in the Profit and Loss Account are as follows :

Current Service Cost 18.70 6.03Interest Cost 10.09 4.13Expected return on plan assets (10.24) –Actuarial (gain) / loss (3.04) (3.23)

Net Cost 15.52 6.93

Amount % invested

V. Composition of Plan Assets :

Insurance Managed Funds 137.60 100% –

VI. Actuarial assumptions :

Interest rate 8% 8%

Discount rate (per annum) 8% 8%

Expected rate of return on plan Assets (per annum) 8% 0%

Rate of escalation in salary (per annum) 10% 10%

Attrition rate 5% 5%

Retirement Age 58 58

4. Advances recoverable in cash / kind / for value to be received includes Rs.54,05,04,712/- being advance given for investments inImmovable Properties.

5. The Company has entered into an agreement for purchase of immovable property being commercial office space of 58000 sq.ft. withthe Developer in Bangalore. Towards this, an advance of Rs.35 Crores has been paid. Subsequently, there was a delay in commencementof the project. The above referred agreement entitles the Company to take appropriate action with regard to this agreement for which theconsent of the developer is deemed to have been given. Accordingly, the Company relinquished its rights to the extent of 29000 sq.ft. inthe previous year and during the year the Company has decided to relinquish its balance rights in the said agreement to the extent of 29000sq.ft. for a consideration of Rs.23,99,25,000/- of which a sum of Rs.6,49,25,000/- has already been received by the Company.

6. The Company has commissioned 2.10 MW Wind Turbine Generator on 30.03.2010 which is generating power for the Company’s captiveconsumption.

7. Liabilities written back of Rs.33,11,278/- disclosed in Schedule No.13 – Other Income, is after netting off irrecoverable advances ofRs.33,23,000/- written off during the year.

8. Considering the nature of operations of the Company, it is not practicable to give quantitative details of turnover and consumption interms of the requirement under Part- II of Schedule –VI to the Companies Act, 1956.

50


2010Rs. in lakhs

9. Prior period items debited/credited to Profit and Loss Account:

Prior period expensesLaundry Expenses 5.07

10. a. Computation of Net Profit (in accordance with Section 349 read withSection 309(5) and Section 198 of the Companies Act, 1956)

Profit for the year 2524.79

Add : Provision for Taxation 696.04

Wealth Tax 0.37

Depreciation Charged 401.19

Commission to the Chairman and the Managing Director 71.30

Remuneration to Managing Director 36.84

Loss on Sale of Investments 674.26

Provision for Diminution in value of Investments 25.96

4430.75

Less : Depreciation under Section 350 401.19

Profit on Sale of Investments 1592.21

Profit on Sale of Fixed Assets 5.50

Profit on relinquishment of rights in immovable properties 649.25 2648.15

1782.60

Commission @ 1% of the above payable to the Chairman and3% to the Managing Director included under the head“Operating and Administrative Expenditure” 71.30

b. Managerial Remuneration to the ‘Chairman’ and ‘Managing Director’Remuneration to the Managing Director 36.84

Commission to the Managing Director 53.48

Commission to the Chairman 17.82

108.14

11. Earnings in Foreign Exchange 2325.49

12. Expenditure in Foreign Currency :Royalty 125.72

Sales Promotion and General Expenses 81.97

Agents Commission for Room Bookings 7.54

13. CIF Value of Imports :Stores, Components and Spare Parts 137.49

Capital Goods 54.37

14. Information as per Order No.46/22/98 CL III Dated 24 February 1998,issued by the Ministry of Finance, Department of Company Affairs :

a. Income From :i. Wines and Liquor 90.00

ii. Telephone and Telex 76.75

b. Consumption of :

i. Provision, Beverages (excluding Wine and Liquor) 369.17

ii. Wine and Liquor 44.31


51



15. Dividends remitted in Foreign Currency to Non Resident Shareholders Rs.4,56,42,260/-

Number of Non Resident Shareholders Number of Shares held by them on which Dividends remitted

2 4564226

16. Related Party Disclosures :

(A) Related Parties and their Relationships :

1. Kapi Investment Ink Limited, Mauritius, Shareholder.

2. M.K.Trading F.Z.E., Dubai, UAE a Company in which Chairman of the Company is a shareholder.

3. C. Pardhanani’s Education Trust, a Trust in which the Chairman of the Company is a Trustee.

4. Pardhanani International Investments } a Private Company in which the Chairman of the Company is a DirectorAnd Holdings Private Limited } and Managing Director of the Company is a Director and shareholder.

5. Pardhanani International Properties } a Private Company in which the Chairman of the Company is a DirectorPrivate Limited } and Managing Director of the Company is a Director and shareholder.

6. Sanko Properties Private Limited } a Private Company in which the Chairman of the Company is a Directorand Managing Director of the Company is a Director and shareholder.

Name of the TransactingRelated party

Relationshipbetween

the transacting party

AmountOutstanding

as on 31.3.2010(Rs.)

Payable (P)OR

Receivable (R)

Nature oftransactions

Kapi Investment Ink Limited Overseas Body Dividend 8,00,000 Nil NilCorporate

Mr.C.B.Pardhanani Chairman Commission 17,82,500 18,24,584 (P)based on profit

Dividend 4,48,42,260 Nil Nil

Mrs.Kavitha C.Pardhanani Director Dividend Nil Nil Nil

Ms.Sangeeta C.Pardhanani Managing Director Dividend 32,42,500 Nil Nil

Remuneration 36,84,000 Nil Nil

Commission based 53,47,500 38,32,027 (P)on profit

C Pardhanani’s Education Trust Trust in which Chairman Donation 7,00,000 Nil Nilof the Company is a trustee

Messrs. M. K. Trading F.Z.E., A company in which the Purchase of Hotel 90,18,389 69,96,196 (R)Dubai, UAE Chairman of the Company Equipments (goods in transit)

is a shareholder

Mr. M. B. Pardhanani Related to Director Dividend 6,02,000 36,72,200 (P) (Under disputeand subjudice)

Mrs.Uma M. Pardhanani Related to Director Dividend 10,25,000 62,52,500 (P) (Under disputeand subjudice)

Ms.Arti M. Pardhanani Related to Director Dividend 3,00,000 18,30,000 (P) (Under disputeand subjudice)

(B) Transaction with Related Parties:

Volume oftransactionsduring theyear (Rs.)

52



17. Disclosure as per Accounting Standard 29 :(In Rupees)

Srl. Particulars Balance Additional Provision BalanceNo. as at Provision Reversed/utilised as at

01.04.2009 made during the year during the year 31.03.2010

1. Provision for Gratuity 3,07,370 5,98,459 – 9,05,829

2. Provision for Leave Encashment 51,42,594 3,27,363 – 54,69,957

3. Proposed Dividend 6,55,05,260 65,50,526 – 7,20,55,786

4. Corporate Dividend Tax 1,11,32,619 11,13,262 – 1,22,45,881

2010Rupees

18. Contingent Liabilities :

Disputed Income Tax Liability against which Appeals are pending

(i) Assessment Year 1997-98 9,55,691

(ii) Assessment Year 2001-02 9,54,168

(iii) Assessment Year 2007-08 14,90,801

19. Estimated amount of contract remaining to be executed on capital account not providedfor Rs. 20.94 lacs

20. In the absence of information as regard to the status / classification of the Relevantenterprises into Micro, Small and Medium Enterprises, information as Required underNotification No. G.S.R 719[E] dated 16.11.2007 issued by the Department of CompanyAffairs in respect of the total amount payable at the end of the year to the SundryCreditors could not be disclosed.

21. Confirmation of balances has not been received from parties covered underSundry Debtors, Loans and Advances and Current Liabilities.

22. Earnings Per Share has been computed as under :

(Rs. in Lakhs)

Net Profit 2509.82

Weighted Average Number of Equity Shares Outstanding 6550526

Earnings Per Share in rupees – Basic and Diluted (Face Value of Rs.10/- each) 38.31

53


(Rs. in ‘000s)





A) CASH FLOW FROM OPERATING ACTIVITIES :Net profit before tax & Extraordinary Items 32,05,87Adjustment for :Depreciation 4,17,31Profit on sale of fixed assets (5,50)Profit on sale of investments (15,92,21)Loss on sale of investments 6,74,26Provisions for diminution in value of Investment 25,96Dividend received (70,75)Interest Paid 3,67Profit from relinquishment of rights in immovable properties (6,49,25)Operating profit before working capital changes 20,09,36Adjustment for :Trade and other receivables 8,15,39Inventories (1,00)Trade Payables 5,11,10Cash generated from operations 33,34,85Direct Tax (paid)/refund 3,70,66Net Cash from/(used) in Operating Activities 37,05,51

B) CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of Fixed assets (13,29,78)Sale of Fixed assets 6,05Advance towards Investment in immovable Properties (22,27,95)Purchase of Investments (1,22,74,97)Sale of Investments 1,06,15,61Proceeds from relinquishment of rights in immovable properties 23,99,25Dividend Received 70,75Net Cash from/(used) in Investing Activities (27,41,04)

C) CASH FLOW FROM FINANCING ACTIVITIES

Dividend Paid including Corporate Dividend Tax (7,66,38)Interest paid (3,67)Increase in cash credit / overdraft 65,41Decrease in Secured Loans (2,00,50)Decrease in Unsecured Loans (21,41)Net cash from/(used) in Financing Activities (9,26,55)

Net increase / (decrease) in cash/cash equivalents 37,92Opening cash / cash equivalents 3,02,27

Closing cash / cash equivalents * 3,40,19

*includes cash and cash equivalants, being amounts lying in the unpaiddividend accounts which are not available for use by the companyamounting to Rs.2,81,46.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010PARTICULARS 2010

54


MAC CHARLES (INDIA) LIMITEDRegistered Office : 28, Sankey Road, Bangalore - 560 052

ATTENDANCE SLIP(To be handed over at the entrance of the meeting hall)

I hereby record my presence at the THIRTIETH ANNUAL GENERAL MEETING of the Company held at the

Hotel Le Meridien No. 28, Sankey Road, Bangalore - 560 052 on Tuesday the 31st August, 2010 at 3 p.m.

Full Name of Member (in Block Letters) .........................................................................................................................................

Reg. Folio No. ............................................................................................................ No. of Shares held .......................................

Full Name of Proxy (in Block Letters) .............................................................................................................................................

Member’s /Proxy’s Signature ...........................................................................................................................................................

NOTE : Shareholders are requested to bring this slip to the Meeting duly filled up including Folio Number & Number ofShares held.

MAC CHARLES (INDIA) LIMITEDRegistered Office : 28, Sankey Road, Bangalore - 560 052

PROXY FORM

I/We .................................................................................................................................................................................................

of ......................................................................................................................................................................................................

being a Member / Members of Mac Charles (India) Limited hereby appoint ..................................................................................

of ................................................. or failing him/her ............................................................... of ...................... as my/our proxy of

vote for me/us on my/our behalf at the THIRTIETH ANNUAL GENERAL MEETING of the Company to be held

on Tuesday the 31st August, 2010 at 3 p.m.

Reg. Folio No. ...........................................

No. of Shares ............................................ Signed this .......................................................................................................

NOTE : This form duly completed and signed must be deposited at the Registered Office of the Company not less than48 hours before Meeting.

�

�

AffixRe. 1/-

RevenueStamp

55

annual report le meridien

Documents

wind turbine

status classification

nedstar hotels

complimentary

weighted average

employee benefit

accrued expenses

housekeeping